Law:

Section:

Section 2(m) of the Wealth-tax Act, 1957 - Net wealth - Assets belonging to assessee - Assessment years 1976-77 to 1978-79 - Assessee was sole beneficiary of a family trust formed on 1-6-1974 - As per trust deed, after 18 years, corpus and income of trust were to vest with assessee or on his marriage with his wife absolutely - Till date of marriage, trustee was entitled to apply income of trust for benefit of assessee in his absolute discretion and for exclusive benefit of his wife thereafter expiry of said period, Assessing Officer included assessee's interest in trust property in his net wealth and brought same to tax for assessment years 1976-77 to 1978-79 - Whether since period of 18 years had not completed till valuation date, nor assessee got married corpus would not vest with assessee and same would remain in absolute discretion of trustee - Held, yes - Whether assessee not being entitled to any income as of right, it could not be included in his net wealth and be considered in hands of trust - Held, yes FACTS The assessee was the sole beneficiary of a family trust formed on 1-6-1974. As per the trust, in case the assessee remained unmarried till the end of 18 years from the date of execution, of the deed, the corpus as well as the accumulated income would be handed over and delivered to him to be enjoyed by him absolutely. In the event of his marrying, the corpus as well as the accumulated income would be handed over and delivered to his wife from the date of marriage. The Assessing Officer included the assessee's interest in the trust property even before the expiry of the said period of 18 years in his net wealth and brought to tax. He rejected the assessee's contention that the net wealth of the trust should be assessed only in the hands of the trust. On appeal, the Commissioner (Appeals) held that, as the trust properties were already assessed to wealth tax in the hands of the trustee for the assessment years in question, the same would not again be included in the hands of the assessee. The Tribunal upheld the order of the Commissioner (Appeals). On reference : HELD From the trust deed it was seen that after completion of 18 years, the corpus and…

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