TMI Blog1998 (2) TMI 14X X X X Extracts X X X X X X X X Extracts X X X X ..... tax Act, a claim which was not made by the assessee before the Wealth-tax Officer, Appellate Assistant Commissioner ?" The assessee in the instant case is a minor. For the assessment year 1976-77, the assessment of wealth-tax, in the case of the assessee, was made on his father and natural guardian, the respondent herein, in his representative capacity. The father of the assessee claimed exemption before the Wealth-tax Officer under section 5(1)(xxxii) of the Act in respect of the interest of the assessee in the firm, amounting to Rs. 57,317. The Wealth-tax Officer denied the exemption on the ground that the minor assessee was not a partner of the firm, although his father was a partner in a representative capacity. On appeal, the Appella ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... challenged the order of the Appellate Tribunal and the reference has been made to this court by the Tribunal on the question of law set out earlier. Mr. C. V. Rajan, learned standing counsel for the Revenue, submitted that under the Indian law, the trustee is a legal owner of the property and, therefore, the assessee is not entitled to claim exemption under section 5(1)(xxxi) of the Act. In so far as the new plea entertained by the Appellate Tribunal, i.e., the claim for exemption under section 5(1)(xxxi) of the Act is concerned, learned counsel for the Revenue fairly brought to the notice of the court in the decision of the Supreme Court in the case of National Thermal Power Co. Ltd. v. CIT [1998] 229 ITR 383 wherein the Supreme Court he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eme of the Act contemplates that the assets belong to the beneficiary and tax is levied on that basis, we are of the opinion that the exemption claimed on that basis should also be granted to the beneficiary and cannot be denied on the ground that the beneficiary is not the legal owner of the trust property. The Supreme Court in the case of CWT v. Trustees of H. E. H. Nizam's Family (Remainder Wealth) Trust [1977] 108 ITR 555 considered the expression "belonging to" under section 21 of the Wealth-tax Act and the observations of the Supreme Court are relevant for the purpose of this case : "This provision obviously can apply only where the trust properties are held by the trustee for the benefit of a single beneficiary or, where there ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the beneficiary, the wealth-tax can be levied on the trustee in respect of the interest of the beneficiary in the trust properties in the same manner and to the same extent as it would have been leviable on the beneficiary and in respect of such interest in the trust properties, the trustee would be assessed in a representative capacity as representing the beneficiary. No doubt, it is true that the Wealth-tax Officer can make a direct assessment on the beneficiary on the ground that the trust properties belong to the assessee. Once the position of law is that the trust property belongs to him and is recognised in section 21 of the Wealth-tax Act, it cannot be said that the assessee is not entitled to exemption under section 5(1)(xxxi) of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he beneficiary when the Wealth-tax Officer invokes the provisions of section 21 of the Wealth-tax Act and makes the assessment on the trustee in a representative capacity or against the beneficiary on the basis of the assets held by him. We are in respectful agreement with the views expressed by the Kerala High Court as well as the Calcutta High Court. We, therefore, hold that the Tribunal was correct in holding that the assessee is entitled to exemption under section 5(1)(xxxi) of the Wealth-tax Act. So far as the other part of the question regarding the jurisdiction of the Appellate Tribunal to entertain the new plea raised on behalf of the assessee with reference to section 5(1)(xxxi) which was not made before the lower authority, is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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