TMI Blog1990 (7) TMI 43X X X X Extracts X X X X X X X X Extracts X X X X ..... Tribunal for the assessment years 1959-60 and 1960-61 in R. A. Nos. 728 and 729 of 1964-65. Since, however, neither Shri Jetley, learned counsel for the Department, nor Shri Andhiarujina, learned counsel for the assessee, was able to tell the court about the fate of those applications, we have considered the questions on merits. The assessee is one of the two daughters of the late Dowager Lady Serenebai J. Jeejeebhoy. The proceedings relate to her wealth-tax assessments for the assessment years 1961-62 and 1963-64 for which the valuation dates are March 31, 1961, and March 31, 1963. The late Dowager Lady Serenebai J. Jeejeebhoy had created a trust under her will dated October 14, 1933. The provision in the will as per clause 12 thereof, was as follows : "My trustees shall hold and stand possessed of my said property and the investments for the time being representing the same (hereinafter called "THE RESIDUARY TRUST ESTATE") upon trusts following (that is to say) : (a) UPON TRUST to divide the Residuary Trust Estate into two separate equal parts, and (b) UPON TRUST TO HOLD and stand possessed of one of such part IN TRUST to pay the income thereof to my daughter Ruttonbai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t year 1963-64. The Tribunal's earlier orders dated April 21, 1964, and July 27, 1964, are also annexed to the statement of the case. Shri Jetley took us through all the three Tribunal's orders. He stated that the Tribunal had treated the assessee's right to income, i.e., life interest to the income from the trust fund, as an "asset". However, the Tribunal had further held that such an interest was incapable of valuation under section 7(1) as it could not be sold, there being a ban on its alienation. The Tribunal, he pointed out, also held that the interest was an annuity which was not commutable and as such the life interest was not an "asset" within the meaning of section 2(e) of the Wealth-tax Act. Placing reliance on this court's decision in the case of CWT v. Purshottam N. Amersey [1969] 71 ITR 180, which was confirmed by the Supreme Court in Purshottam N. Amarsay v. CWT [1973] 88 ITR 417, Shri Jetley submitted that the expression "if sold in the open market" used in section 7(1) did not contemplate actual sale or the actual state of the market. It was merely to be assumed that there was an open market and the property could be sold in such a market. The value of the prope ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es not include,-..." The section itself evidently provides that certain types of assets shall not constitute "asset" for the purpose. One such exemption is found in clause (iv) which reads thus: "(iv) a right to any annuity in any case where the terms and conditions relating thereto preclude the commutation of any portion thereof into a lump sum giant" We will first examine whether the assessee's life interest herein is an "asset" independent of clause (iv). We will then consider whether such an interest falls within the exception clause (iv) so as to take it out of the definition of "asset". The word "property" is not defined under the Wealth-tax Act. But it has been held by the Supreme Court in the case of Ahmed G. H. Ariff v. CWT [1970] 76 ITR 471 that "property" is a term of the widest import and, subject to any limitation which the context may require, it signifies every possible interest which a person can hold and enjoy. Accordingly, we have no difficulty in holding that the assessee's life interest is an "asset". This takes us to the second pertinent question, namely, whether this interest also falls within the exception in section 2(e)(iv) so that it will not be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the relevant years is immaterial." This question again came up before the Supreme Court recently in the case of (Late) Nawab Sir Mir Osman Ali Khan v. C WT [1986] 162 ITR 888. The subject-matter of consideration in that case was a sum of Rs. 25 lakhs paid to the assessee annually by the Government in lieu of the income from the Sarf-e-Khas. Referring to its earlier decisions in the cases of CWT v. H. H. Maharani Gayatri Devi of Jaipur [1971] 82 ITR 699 (SC) and CWT v. P. K. Banerjee [1980] 125 ITR 641 (SC), it was held that, having regard to the terms of payment and the circumstances under which the payment was made, there cannot be any doubt that Rs. 25 lakhs paid annually was an "annuity". It was a fixed sum to be paid out of the property of the Government of India in lieu of the previous income of the assessee from Sarf-e-Khas and was, therefore, an annuity. The aforesaid two decisions were distinguished as, in both these cases, what was paid was not a fixed sum but income. It was 50% of the income in Gayatri Devi's case [1971] 82 ITR 699 (SC) whereas it was 100% in the case of Banerjee [1980] 125 ITR 641 (SC). In our judgment, the ratio of the aforesaid two decisions is squ ..... X X X X Extracts X X X X X X X X Extracts X X X X
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