TMI Blog1967 (4) TMI 30X X X X Extracts X X X X X X X X Extracts X X X X ..... question, namely : "Whether the Tribunal was justified in holding that the provisions of section 21(4) of the Wealth-tax Act did not apply to the facts of the present case ? The facts of the present case have been set out in the statement of the case with which the said question has been referred to us by the Tribunal. The assessees are the trustees of H. E. H. The Nizam's Supplemental Family Trust. The assessment years are 1957-58, 1958-59 and 1959-60 for which the corresponding valuation dates are March 31, 1957, March 31, 1958, and March 31, 1959, respectively. The Wealth-tax Officer held that the shares of the beneficiaries were not determinate and, therefore, the trustees were liable for assessment on the whole of the wealth, and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the expenditure of the trust into a separate " expenses account fund ". The income corresponding to the units allocated to each of the beneficiaries was to be paid to the respective beneficiaries during their lifetime and thereafter it was to be divided as provided under clauses 4, 5 and 6 of the trust deed. In the case of each beneficiary, the heirs were to inherit the trust funds allocated to him or her in certain proportions as provided in the said three clauses. The trustees contested before the Wealth-tax Officer their liability to the tax on two grounds, viz., (1) that the trustees, being an association of persons, cannot be taxed to wealth-tax, as the charging section 3 does not contemplate charging the wealth of " association of pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eed, they are known persons and their shares are determinable under the law. Looked at from whatever angle, the provisions of section 21(4) are inapplicable." The only point that is canvassed before us is that the shares are not determinate, inasmuch as there is a term in the trust deed by and under which the income from the trust fund cannot be distributed during the lifetime of the settlor. According to the learned advocate for the department, the term which requires accumulation of the income during the settlor's lifetime would make the shares indeterminate. But we are unable to understand how such a contention could be addressed because under the trust deed, the beneficiaries have a vested right in the accumulated income of the corpus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f 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." It will be observed that, in order to apply the provisions of section 21(4) one of the important ingredients is that the shares of the person on whose behalf or for whose benefit any such assets are held should be indeterminate or unknown, and it is only then that the Wealth-tax Officer may levy and recover tax from the trustee as if the person on whose behalf or for whose benefit the assets are held was an individual. In other words, the whole of that wealth would become lia ..... X X X X Extracts X X X X X X X X Extracts X X X X
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