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Issues Involved:
1. Applicability of section 4(1)(a)(iii) of the Wealth-tax Act, 1957. 2. Inclusion of minors' share in the trust property in the net wealth of the assessee. 3. Determination of beneficial interest during minority. Issue-wise Detailed Analysis: 1. Applicability of section 4(1)(a)(iii) of the Wealth-tax Act, 1957: Section 4(1)(a)(iii) of the Wealth-tax Act, 1957, stipulates that in computing the net wealth of an individual, the value of assets transferred directly or indirectly to a minor child, except a married daughter, should be included if the transfer is for the immediate or deferred benefit of the minor. The primary question was whether the trust deed executed by the assessee, which did not provide any immediate or deferred benefit to the minors during their minority, would attract this provision. 2. Inclusion of minors' share in the trust property in the net wealth of the assessee: The Wealth-tax Officer included the value of the properties related to the minors' share in the assessee's net wealth, arguing that the trust was for the deferred benefit of the minors. This decision was upheld by the Appellate Assistant Commissioner. However, the Tribunal, relying on precedents from the Bombay High Court and Gujarat High Court, concluded that since no benefit was provided to the minors during their minority, section 4(1)(a)(iii) was not applicable. The Tribunal's decision was based on the fact that the minors did not receive any income or benefit from the trust during their minority, as specified in the trust deed. 3. Determination of beneficial interest during minority: Clause IV of the trust deed stated that minors would only become beneficiaries upon reaching majority. Clause VI detailed the distribution of net profits, which were allocated only to major beneficiaries. Clause XIV provided for the extinction of the trust and the distribution of properties among beneficiaries as co-owners and tenants-in-common. The Tribunal found that the minors had no vested interest during their minority, and any interest they might have was contingent upon them reaching majority. The Department's argument that the minors had a vested interest was rejected, as the Tribunal held that the interest was contingent, not vested. Conclusion: The High Court affirmed the Tribunal's decision, stating that the minors did not have any beneficial interest during their minority, and thus, section 4(1)(a)(iii) of the Wealth-tax Act did not apply. The Court referenced similar cases, including the Supreme Court's decision in CIT v. M. R. Doshi and the Madras High Court's decision in CIT v. T. G. K. Raman, which supported the view that deferred benefits not accruing during minority are not includible in the assessee's net wealth. Consequently, the minors' shares were correctly excluded from the assessee's net wealth, and the question referred was answered in the affirmative and against the Department. There was no order as to costs.
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