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Assessment of wealth-tax for the assessment year 1965-66 based on the interpretation of a will and deed of assignment. Analysis: The judgment by the High Court of Gujarat pertains to a reference made by the Income-tax Appellate Tribunal regarding the assessment of wealth-tax for the year 1965-66. The question raised was whether only half or the whole of the capitalised value of the interest of the assessee in immovable properties of trust property should be liable to wealth-tax under the Wealth-tax Act, 1957. The case involved the interpretation of a will left by Pestanji Contractor and a subsequent deed of assignment by Pirojshah, the son. The will specified the distribution of income from the trust property among family members. Upon the death of Jerbai, Pirojshah became entitled to the full income, which he later assigned a moiety of to his children. The dispute arose regarding the computation of the capitalised value of Pirojshah's interest in the trust property for wealth-tax assessment. The court analyzed the provisions of the will, particularly clause 17, which outlined the distribution of income from the trust property. It was observed that Pirojshah did not have an interest in the corpus but was entitled to the income derived from the property for life. After Jerbai's death, Pirojshah assigned a portion of his income to his children, thereby divesting himself of a moiety of the interest accrued to him. The court referred to a previous case to establish that Pirojshah had the right to assign his income interest and that the assignment was valid. Consequently, the court concluded that Pirojshah could only be considered the owner of a moiety in the trust property for wealth-tax purposes. Therefore, the capitalised value of his interest should be computed as half of the total value, affirming the Tribunal's decision. In summary, the court held that Pirojshah, the assessee, was entitled to only half of the income from the trust property as per the will and deed of assignment. Therefore, for wealth-tax assessment, only half of the capitalised value of his interest in the immovable properties of the trust was deemed liable. The judgment favored the assessee, ruling in his favor against the Revenue, with no order as to costs.
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