TMI Blog1989 (3) TMI 170X X X X Extracts X X X X X X X X Extracts X X X X ..... to the two grand-daughters--one among whom is Sb. Fatima Fouzia, can be considered to be an asset assessable to wealth-tax within the meaning of section 2(e) of the Wealth-tax Act is contested. It is also contended that whether sec. 21(1) can be resorted to against the Trustee without specifying all the names of the beneficiaries and their respective interest in the Trust. It is also challenged that the value of the jewellery of Rs. 14,35,545 is assessable in the hands of Trustees in the representative character under sec. 21(1) of the Wealth-tax Act. Nextly it is contended that the decision of the Andhra Pradesh High Court in the case of CWT v. Trustees of H.E.H. the Nizam's Sahebzadi Anwar Begum Trust [1981] 129 ITR 796 can at all be applicable to the facts of the present case. 3. We have heard Sri P. Muralikrishna, learned counsel for the assessee and Sri K.K. Viswanatham, learned D.R. for the department. For assessment years 1976-77 to 1978-79 returns were filed by the assessee on 24-12-1979 disclosing nil wealth. Subsequently on 13/15-2-1984 sec. 17 notice was issued by the Wealth-tax Officer, in pursuance of which again nil return was filed on behalf of the assessee on 9-3- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y in the relevant schedule is of a similar character to that enjoyed by Smt. Anwar Begum in respect of jewellery in Part-I of the Trust Deed, in her case and that the value of such jewellery is assessable u/s 21(1) in the hands of the trustees. Therefore, according to the learned D.R., the order of the CWT(A) is perfectly justified and does not call for any interference from this Tribunal. 4. Firstly let us take up for consideration the question whether the Andhra Pradesh High Court decision in Trustees of H.E.H. the Nizam's Sahebzadi Anwar Begum Trust's case actually applied to the facts of this case. Before deciding this question let us consider the terms of the Trust Deed executed by the Ex-Nizam of Hyderabad on 4-9-1951 under which he made his two grand-daughters Sb. Fatima Fouzia and Amina Marzia and their children after their marriage, beneficiaries under the Trust. Sb. Fatima Fouzia and Amina Marzia were two daughters of the second son of the settlor. The first and second schedules to the Trust Deed consisted of a complete set of ladies' jewellery of oriental type. Para 2 of the Trust Deed is as follows : "The Trust hereby created shall be called 'The Wedding Gifts Tru ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve the share which their parent would have taken if then living Provided, however, that if the said Fatima Fouzia shall die without leaving any child or remoter issue her surviving then the Trustees shall hold Fatima Fouzia's Jewellery Fund UPON TRUST for the Nizam of Hyderabad who may be surviving at the date of the death of the said Fatima Fouzia in order to enable him to meet the essential expenditure for the management of the Sarf-e-khas for which he will be responsible as the Head of the Family of the Settlor shall come to an end for any reason whatsoever and there shall be no Nizam of Hyderabad existing at the date of the death of the said Fatima Fouzia then the Trustees shall in the event aforesaid hand over and transfer Fatima Fouzia's jewellery Fund to the eldest male descendant in the direct male line of succession of the Settlor according to the law of primogeniture then living in order to enable him as the Head of the Family of the Settlor to maintain the dignity of the House of Asaf Jah to which the Settlor belongs and the status and position of the various members of his family." Therefore, the above clauses in the settlement deed clearly show that Sb. Fatima Fouzia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ST for the Nizam of Hyderabad who may be surviving at the date of the death of the said Amina Marzia in order to enable him to meet the essential expenditure for the management of the Sarf-e-Khas for which he will be responsible as the Head of the Family of the Settlor but if the dynasty of the Settlor shall come to an end for any reason whatsoever and there shall be no Nizam of Hyderabad existing at the date of the death of the said Amina Marzia then the Trustees shall in the event aforesaid hand over and transfer Amina Marzia Jewellery Fund to the eldest male descendant in the direct male line of succession of the Settlor according to the law of primogeniture then living in order to enable him as the Head of the Family of the Settlor to maintain the dignity of the House of Asaf Jah to which the Settlor belongs and the status and position of the various members of his family." As can be seen from the above, the disposal of the jewellery mentioned in the second schedule of the trust deed should be made after the death of Sb. Amina Marzia, according to the directions of para 5 extracted above. According to those terms firstly her children would become persons having remaindermen i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s liable to be ascertained which is not done in this case and therefore, the assessment u/s 21(1) is bad. In the Trustees of H.E.H. the Nizam's Sahebzadi Anwar Begum Trust's case for assessment years 1957-58 to 1963-64 the direct question which was referred by this Tribunal was whether the right to wear the jewellery, inter alia, described in the Jewellery Fund constitutes an asset within the meaning of sec. 2(e) of the Wealth-tax Act. The Hon'ble Andhra Pradesh High Court comprising of Justice Chinnapa Reddy and Justice A.D.V. Reddy considered that matter by their judgment dated 5-11-1971 in case referred No. 67 of 1969. They have pointedly addressed themselves to this question. At the close of the judgment after discussing elaborately, what is the concept of an asset and whether every asset should be capable of being sold in the open market and if no right of alienation is given can it be called as an asset, were all considered, their Lordships came to the following conclusion : "Even so, we are not satisfied that the interest of the Shahebzadi in the Jewellery Fund is an asset within the meaning of sec. 2(e) of the Wealth-tax Act. Under the terms of the Trust the Shahebzadi is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and ceremonial occasions throughout their lives of Sb. Fatima Fouzia and Amina Marzia, does not confer any asset on them in the jewellery mentioned in either schedule I or schedule 2 to the Trust Deed titled on "The Wedding Gift Trust of HEH the Nizam's two grand daughters". Further let us see what was the ambit of sec. 21(1). Section 21(1) as far as, is relevant for our purpose reads as follows : "In the case of assets chargeable to tax under this Act, which are held by any Trustee appointed under a Trust declared by a duly executed instrument in writing, the wealth-tax shall be levied upon and recoverable from the Trustee, in the like manner and to the same extent as it would be leviable upon and recoverable from the person on whose behalf (or for whose benefit) the assets are held, and the provisions of this Act shall apply accordingly." Now let us recall to our minds who are all the beneficiaries under Trust as far as we are concerned. In view of the decision of Andhra Pradesh High Court in RC. 67 of 1969 either Sb. Fatima Fouzia or Amina Marzia cannot be called to be beneficiaries as their right to wear jewellery cannot be considered to be property, however, widely that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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