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2015 (2) TMI 22 - HC - Wealth-taxWealth tax assessment - Wedding Gifts Trust - Levy of tax u/s 21 of the Wealth Tax Act - Whether the assessment has to be made under sub-section (1) or sub-section (4) thereof - Held that:- The terms of the Trust Deed are very clear and unambiguous. Even while conferring a limited privilege of wearing the ornaments in favour of the named women, the Trust Deed has clearly mentioned that on the death of the two women, the jewellery shall devolve upon their children - It is true that during the life time of the two women, it is difficult to treat any particular individual as the immediate beneficiary, particularly when the right was restricted only to the one of wearing and returning the jewels. However, in law, what becomes necessary is whether there are any beneficiaries at all. It is immaterial whether they are the beneficiaries at present or in future. Once the Deed has stipulated that on the death of the two women, their children would become the beneficiaries, the occasion to invoke Section 21 (4) of the Act does not arise. The inescapable conclusion is that the assessment must be under Section 21 (1) of the Act. The expression where the shares of the beneficiaries are indeterminate or unknown carried with it, by necessary implication, a situation where the beneficiaries themselves are indeterminate or unknown. Such, for example, would be the case in the modified illustration given above. There, the beneficiaries are such of the children of A as the trustee might think fit and the beneficiaries themselves would, therefore, be indeterminate and unknown and yet sub-section (4) of Section 21 would apply in their case. To take any other view would be to deny full meaning and effect to the words where the shares of the beneficiaries are indeterminate or unknown and to create a lacuna where, even though the beneficial interest in the remainder is disposed of under the trust deed, such beneficial interest would escape assessment. The correct interpretation of sub-section (4) of Section 21 must, therefore, be that even where the beneficiaries of the remainder are indeterminate or unknown, the trustee can be assessed to wealth-tax in respect of the totality of the beneficial interest in the remainder, treating the beneficiaries fictionally as an individual. - view taken by the Commissioner and the Tribunal is correct - Decided in favour of assessee.
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