9911796707
TMI Blog1988 (8) TMI 2X X X X Extracts X X X X X X X X Extracts X X X X ..... ren, while the third specified a period of 30 years. The minimum annual payments to be made under the three trust deeds to the assessee by way of maintenance were Rs. 250, 150 and Rs. 250, respectively. Under each of the trust deeds, the settlor specified the interest of the beneficiaries in the trusts. The pertinent terms of one of them, the Arvind Narottam Trust deed, may be set forth here. Clauses 7 and 8 of that trust deed provide : " 7. (a) Whatever income by way of interest or otherwise is received each year by the trustees from the trust fund should be first applied in meeting the expenses of the management of the trust and the payment of taxes thereof. For a period of 18 years hereafter, the trustees may pay to Arvind, or if Arvind gets married during the period to Arvind, his wife and children or to one or more of these persons, such portion of the net income remaining thereafter as the trustees deem fit. However, the trustees shall pay to Arvind, or if Arvind gets married during the period, to each of Arvind and his wife, at least Rs. 150 every year. After such distribution, if there remains any surplus from the income of any year, it shall be added to the corpus of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... equal share for each of the persons or survivors comprising of Arvind, his wife and his children. If none of the said persons are alive at the time of distribution, then the distribution will be made to Niranjan, his wife and his children or survivors, all or such of them and in such proportion as the trustees deem fit. If none of the said persons are alive at the time of distribution, then the corpus and the balance of income will be given over by the trustees on such conditions as they deem fit as donation to the Gujarat University or any other educational institution or an institution giving medical aid or attending to the health of public in general. But, if Arvind and his wife are the trustees at that time, then they have no right to give vote in the above matter. But, if the other trustees unanimously agree to allow them to vote, then they can." The Wealth-tax Officer made the assessment orders for the assessment years 1962-63, 1963-64 and 1964-65 under the Wealth-tax Act, the relevant valuation dates being, respectively, December 31, 1961, December 31, 1962, and December 31, 1963. He assessed the assessee under sub-section (2) of section 21 of the Wealth tax Act on the enti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r whose benefit the assets above referred to are held, or the recovery from such person of the tax payable in respect of such assets ......... (4) Notwithstanding anything contained in this section, where the shares of the persons on whose behalf or for whose benefit any such assets are held are indeterminate or unknown, the wealth-tax may be levied upon and recovered from the court of wards, administrator-general, official trustee, receiver, manager or other person aforesaid as if the persons on whose behalf or for whose benefit the assets are held were an individual who is a citizen of India and resident in India for the purposes of this Act. " The contention of Dr. V. Gauri Shankar, on behalf of the Revenue, is that the settlor had specifically made these three trusts for the benefit of his son, Arvind, the assessee, and has declared unequivocally that the settlement is for the benefit of the assessee, and on the assessee's marriage also for the benefit of his wife and children. It is urged that the High Court has erred in failing to collect the real intention of the settlor from the entire document and has erroneously confined itself to paragraph of the deed. According to lea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the family as they chose. In support of the proposition that the expression " property " is term of the widest amplitude and that every possible interest is includible therein, we are referred to Ahmed G. H. Ariff v. CWT [1970] 76 ITR 471 (SC). I have no doubt that the expression " property " must bear a comprehensive import. The question remains whether what is conveyed under the three deeds of settlement to the assessee is a right to anything more than the prescribed minimum under each deed. I may reiterate that the interest extends to no more than that minimum. It is contended on behalf of the Revenue that the fact that a beneficiary may change on the happening of certain contingencies will not make the share of the beneficiary undetermined or unknown, and reliance has been placed on Padmavati Jaykrishna Trust v. CWT [1966] 61 ITR 66 (Guj), CWT v. Trustees of Mills. Hansabai Tribhuwandas Trust [1968] 69 ITR 527 (Bom), CWT v. Trustees of H.E.H. Nizam's Family (Remainder Wealth) Trust [1977] 108 ITR 555 (SC) and CWT v. Trustees of H.E.H. the Nizam's Sahebzadi Anwar Begum Trust [1981] 129 ITR 796 (AP). These cases can be of no assistance to us, for unlike the facts in each of tho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dy has noticed the change in judicial attitude to tax avoidance devices. Justice Reddy mentioned that in the country of its birth, the principles of Westminster, of condoning tax avoidance have been given a decent burial. In that very country, the phrase " tax avoidance " is no longer condoned or looked upon with sympathy. It is true that tax avoidance in an underdeveloped or developing economy should not be encouraged on practical as well as ideological grounds. One would wish, as noted by Reddy J., that one could get the enthusiasm of justice Holmes that taxes are the price of civilization and one would like to pay that price to buy civilization. But the question which many ordinary taxpayers very often, in a country of shortages with ostentatious consumption and deprivation for the large masses, ask is, does he with taxes buy civilization or does he facilitate the waste and ostentation of the few. Unless waste and ostentation in Government spending are avoided or eschewed, no amount of moral sermons would change people's attitude to tax avoidance. In any event, however, where the true effect on the construction of the deeds is clear, as in this case, the appeal to discourage t ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
