TMI Blog1974 (11) TMI 21X X X X Extracts X X X X X X X X Extracts X X X X ..... s of Uganda Cotton Company Ltd. upon trust for the benefit of the first petitioner and other beneficiaries. All the terms of the two deeds of settlement so far as is material for the purposes of this judgment are identical. Under clause 3(a) of the trust deed, the net income of the trust was to be paid till January 1, 1948, to the two sons of the settlor, Arvind N. Mafatlal and Yogindra N. Mafatlal, in equal shares absolutely at the end of every calendar year and under clause 3(b) from and after the first day of January, 1948, the whole of the residue of the net income of the trust fund is to be paid to the first petitioner during her life at the end of every calendar year absolutely. Sub-clauses (c) and (d) of clause 3 of the trust deeds provide for the eventuality of the first petitioner dying childless. However, it is common ground between the parties that the first petitioner has got children and, therefore, the eventuality contemplated by clause 3(c) and clause 3(d) is not likely to arise. Under clause 3(e) an option is given to the first petitioner after she has attained the age of majority and after the birth of her first child to call upon the trustees to pay her a part of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ars. The trustees contended that the beneficiaries were known and the shares of the beneficiaries were determinate and known and hence the trustees should be assessed under section 21(1) of the Wealth-tax Act and not under section 21(4) of the Wealth-tax Act. It was also submitted that if the value of the life interest of the first petitioner in the trust funds was to be included in the total wealth of the first petitioner, a corresponding deduction should be allowed in the assessment of the trusts while determining the wealth of the trusts. The Wealth-tax Officer held that the shares of the beneficiaries could not be said to be determinate or known as on the valuation date and he assessed the trustees under section 21(4) of the Act. Since he assessed the trustees under section 21(4) he further held that as there was no provision in the Act for deduction as was sought for by the trustees the deduction could not be granted. The assessees took the matter in appeal to the Appellate Assistant Commissioner but it appears that the trustees did not press the ground of section 21 (1) and they merely proceeded upon the footing that the interest of the first petitioner was an annuity. The gr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ification application proceedings held that there was no mistake apparent on the face of the record which needed to be rectified under section 35 of the Act and by its order dated May 10, 1973, dismissed the application for rectification. The present special civil application is directed against annexure "I", the order passed by the Tribunal in rectification proceedings. It is clear in the light of the decision of this court in Commissioner of Income-tax v. Karamchand Premchand Pvt. Ltd. that where, in an appeal to the Appellate Assistant Commissioner by the assessee against an order of assessment, the assessee has not questioned the decision of the Income-tax Officer on a point decided, and the Appellate Assistant Commissioner has not in his order considered that point, the assessee is not entitled to question the decision of the officer on that point in an appeal to the Appellate Tribunal against the order of the Appellate Assistant Commissioner and the Tribunal is not entitled to allow the assessee to agitate the question under the guise of granting leave under rule 11 of the Income-tax (Appellate Tribunal) Rules, 1963. It is, therefore, clear that the Tribunal rightly held i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessees in the firm and made a final assessment. The mistake is not in the record but by a subsequent assessment of the firm, it was discovered that the earlier assessment was wrong to the extent of the assessees' share in the firm. It is not a mistake apparent from the record but a mistake discovered from the disposal of another case." Relying on this passage Mr. Kaji contended before us that in this particular case there was the record of the case of the first petitioner and there was the record of the case of the trustees and because of what happened in the case of the trustees, it cannot be said that there was a mistake apparent from the record so far as the beneficiary, the first petitioner, was concerned. We are unable to accept this argument. Argument by analogy is always dangerous and is likely to mislead one into deciding a point wrongly. It must not be forgotten that the trustees were sought to be assessed under section 21 of the Wealth-tax Act. As has been pointed out in Commissioner of Wealth-tax v. Kumari Manna G. Sarabhai: "... the assessment which is contemplated to be made on the trustees under subsections (1) and (4) of section 24 is assessment in a represen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (1). When assessment is made on the trustees on the fictional basis as if the beneficiaries were one individual, it is assessment on the trustees in a representative capacity and what is assessed to wealth-tax is the totality of the interest of the beneficiaries in the trust properties. It is, therefore, apparent that once assessment is made on the trustees in respect of the interest of the beneficiaries in the trust properties under sub-section (4), the beneficiaries cannot be again assessed directly in respect of their interest in the trust properties. The interest of the beneficiaries in the trust properties having suffered assessment to wealth-tax in the hands of the trustees in a representative capacity, cannot again be assessed to wealth-tax in the hands of the beneficiaries." In view, of this decision in Commissioner of Wealth-tax v. Kumari Manna G. Sarabhai, it is obvious that once the trustees were assessed under section 21(4) of the Act, it was not open to the revenue to assess the beneficiary, the first petitioner herein, so far as her interest in the same trust funds was concerned. The beneficiary, the first petitioner, could not have been again assessed directly in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the properties. But in reality and in substance it is the beneficiary concerned, the person on whose behalf the property is held, in respect of whose wealth the assessment proceedings are being held. Under these circumstances it is obvious that the contention of the revenue based on the above quoted passage from the decision of Subba Rao C. J. cannot help the revenue and that contention must be rejected. Mr. Kaji, on behalf of the respondent, lastly contended that What was sought to be assessed so far as the first petitioner, the beneficiary, was concerned was her right to receive income from the trust funds but she was not sought to be assessed for any corpus of the trust funds. On the other hand, the trustees were being assessed in respect of the wealth held by them and, therefore, a clear distinction should be made between the assessment against the trustees in respect of the corpus of the trust funds and on the assessment against the beneficiary on the valuation of her right to receive income from this very trust fund. This argument also must be rejected because the whole scheme of section 21 of the Act is that the trustees whether they hold the trust funds for the life ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
