TMI Blog1980 (3) TMI 15X X X X Extracts X X X X X X X X Extracts X X X X ..... come out of the balance of 527 units was directed to be divided among the members of the family mentioned in the trust during their lifetime to enable them to meet their pocket expenses. The WTO held that the corpus relating to 23 units as per cl. 4 of the trust deed should be treated as wealth liable to wealth-tax in the hands of the assessee-trustee under s. 21(4) of the W.T. Act (hereinafter referred to as " the Act ") overruling the claim of the trustees that they were entitled to the statutory allowance of Rs. 1,50,000 under s. 5(1A) of the Act. On appeal by the assessee, the AAC allowed the assessee's claim for the deduction of Rs. 1,50,000 on the ground that s. 21(4) of the Act was not applicable at all as the trustees were not ho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... court to direct the Income-tax Appellate Tribunal, Hyderabad, to state a case and refer the above three questions of law for the opinion of this court. Section 5 of the Act deals with exemptions in respect of certain assets. Section 5(1A) specifically limits the exemption to a total of Rs. 1,50,000 in respect of the assets specifically mentioned in that sub-section. Under the Explanation to s. 21(4) of the Act certain of the assets referred to therein should not be excluded in the computation of the net wealth in case the matter does not fall under the proviso to s. 21(4). In other words, in respect of the assessment of a trustee under s. 21(4), the ordinary benefits are allowable if the matter is covered by the second proviso to s. 21(4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Nizam was treating these " ladies of position " and " khawases " as his relatives. Examining from that point of view, the Income-tax Appellate Tribunal found that the above beneficiaries fall within the category of " relatives " in a wider context. The Income-tax Appellate Tribunal also found that taking into account the facts and circumstances relevant at the time of creation of the trust, the persons mentioned in Sch. II to, the trust deed are not only relatives but also the dependents of the settlor for their support and The Appellate Tribunal, therefore, ruled that the second proviso to s. 21(4) of the Act would fully apply to the facts of this case entitling the assessee to the benefits of the normal rates of taxation. We are in e ..... X X X X Extracts X X X X X X X X Extracts X X X X
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