TMI Blog1973 (4) TMI 26X X X X Extracts X X X X X X X X Extracts X X X X ..... our attention to them. The deceased directed under clause 13 of the will that a sum of Rs. 5,00,000 should be set apart from his estate and invested in shares of banks or joint stock companies or Government securities and the net income from such investments should be paid to Smt. Alamay, wife of his son, Manekshah, " for the benefit of Manekshah till he survives " and Manekshah should be entitled to utilise the amount of such income " according to his sweet will ". Clause 13 of the will also made a provision for disposal of the corpus after the death of Manekshah. Likewise, by clause 14 of the will, the deceased directed that a sum of Rs. 5,00,000 should be set apart from his estate and invested in shares of banks or joint stock companies or Government securities and the net income from such investment should be paid to his another son, Nadirshah, during his lifetime. The deceased also gave further directions regarding the disposal of the corpus after the death of Nadirshah. Clause 15 of the will provided that so far as these two amounts of Rs. 5 lakhs each were concerned, " the trustees should invest them in shares or securities and get them transferred in their names as my trust ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the Tribunal. The assessee contended before the Tribunal that the Government securities of the face value of Rs. 4,61,000 which were meant for the benefit of Manekshah stood in the joint names of Manekshah and his wife while the Government securities of the face value of Rs. 4,61,000 which were meant for the benefit of Nadirshah stood in the joint names of Nadirshah, the assessee, and one other person, and since neither lot of Government securities stood in the name of the assessee and the assessee had no control or dominion over either of these two lots of Government securities, they could not be said to be held by the assessee within the meaning of section 21, sub-section (1), and no wealth-tax could be levied on them in the hands of the assessee by relying on that provision. This contention found favour with the Tribunal and on the view that the Government securities did not stand in the name of the assessee and the assessee had no control or dominion over them and they could not, therefore, be said to be held by the assessee for the benefit of any person but they were in fact held directly by the beneficiaries themselves, the Tribunal deleted the inclusion of the value of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is the form in which sub-section (1) of section 21 stood during the relevant assessment years. It may be pointed out that by Act 46 of 1964, the words " or for whose benefit " were added after the words " on whose behalf " but, as is evident from the decision of the Supreme Court in Commissioner of Wealth-tax v. Kripashankar Dayashanker Worah, the addition of these words did not make any alteration in the law but merely clarified the true import of the provision as it was likely that an argument may be raised that a trustee holds assets for the benefit of the beneficiaries and not on their behalf and is, therefore, not within the scope and ambit of the provision. The crucial words in sub-section (1) of section 21 which fall for consideration are " assets...... which are held by...... any trustee appointed under a trust declared by a duly executed instrument in writing, whether testamentary or otherwise ". What is the meaning of the expression " held by...... any trustee " ? The argument urged on behalf of the assessee was that, in the context in which the word " held " occurred, it could connote only factual management and an asset could be said to be " held " by a trustee only if ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the meaning of a word is not constant. It varies according to the context in which it is used. No less eminent an authority than Mr. Justice Holmes has pointed out that a word is the skin of a living thought. What is the meaning of a word must, therefore, depend on the context and the setting in which it is used and the purpose it is intended to achieve. It is possible that, in one context a word may mean one thing and, in another, it may mean something different. That is so with the word " held " and we have, therefore, to see what, in the context in which it is used in section 21, sub-section (1), this word means. Now one thing is clear, namely, that the word " held " when used in reference to receiver or manager cannot include the concept of vesting, for it is clear law that the property does not vest in a receiver or manager. The receiver or manager only manages the property on behalf of others and, therefore, the word " held " in that context must mean factual management. But the question before us does not arise in relation to receiver or manager. We have to consider what is the meaning of the word " held " when used in reference to a trustee. The answer to this question woul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... but which stood in some other name or names were liable to be excluded in computing the net wealth of the assessee under section 5(1)(xvi). That section exempted from computation of net wealth all National Savings Certificates and other certificates " held " by the assessee. The argument of the revenue was that this exemption was limited only to those certificates which stood in the name of the assessee and did not extend to certificates which stood in the names of his nominees, though the assessee had beneficial ownership in such certificates. This argument was accepted by a Division Bench of this court and the Division Bench took the view that the word " held ", in the context in which it occurred, was used to denote certificates registered in the name of the assessee. This view was taken by the Division Bench because the legislature had used two different expressions in the provisions of the Wealth-tax Act, namely, " belonging to " and " held ", and this deliberate use of two different expressions clearly indicated that the legislature intended to use them in different senses and the word " held " could not, therefore, be given its broad general meaning, namely, " belonging to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... merely because an asset, though forming part of the trust property, stands in the name of another person, it cannot be said to be " held " by the trustee for the benefit of the beneficiary. The test is : does the asset form part of the trust property ? If it does, it must be said to be held by the trustee for the benefit of the beneficiary, even though it may stand in the name of a nominee. Now, in the present case, the Government securities of the face value of Rs. 4,61,000 stood in the joint names of Manekshah and his wife in the one case and in the joint names of Nadirshah, assessee, and another person in the other case. But they continued to form part of the trust property and the assessee was not discharged from his obligations as trustee in respect of them. In fact, according to clause 15 of the will, the Government securities of the face value of Rs. 4,61,000 should have remained in the name of the assessee but it appears that, since the life interest in these Government securities was given to Manekshah and Nadirshah, the assessee transferred these Government securities to the joint names of Manekshah and his wife in the one case and Nadirshah, assessee, and one other pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ach entitled only to a life interest and the corpus in each case was to follow another destination as directed in the will. The Government securities thus continued to remain subject to the trust and they could not be transferred to the respective beneficiaries as persons entitled under the will. The transfer of the Government securities to the respective beneficiaries and other persons was, therefore, merely, as benamidars for the sake of convenience and the Government securities continued to be held by the assessee as trustee for the benefit of the beneficiaries under the will. We must, therefore, hold that the Tribunal was in error in taking the view that the Government securities of the face value of Rs. 4,61,000 in the case of Manekshah as also in the case of Nadirshah were not held by the assessee for the respective benefit of Manekshah and Nadirshah. The Government securities were held by the assessee as a trustee for the respective benefit of Manekshah and Nadirshah and the assessee was liable to be assessed to wealth-tax in respect of the value of the life interest of Manekshah and Nadirshah in the Government securities under section 21, sub-section (1). We, accordingly, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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