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TMI Blog1996 (7) TMI 26X X X X Extracts X X X X X X X X Extracts X X X X ..... of the assets settled by assessee for the deferred benefit of her son's minor son under a trust deed, dt. 29th March, 1974 could be included in the net wealth of assessee either under s. 4(1)(a)(i) or under s. 4(1)(a)(v) of the WT Act ?" Question No. 2: "Whether, on the facts and in the circumstances of the case and having regard to the provisions of s. 4(1)(a) of the WT Act, the Tribunal was right in deleting the inclusion of Rs. 41,000 being the value of the property settled by the assessee on her grandson, as per deed, dt. 29th March, 1974 ?" 2. The assessee is an individual. All the three Tax Cases relate to the asst. yrs. 1976 -77 to 1978-79. By a deed, dt. 29th March, 1974, she settled certain immovable properties being godowns ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sidered to be transferred to the spouse within the meaning of s. 4(1)(a)(i) of the Act. 5. Aggrieved, the assessee filed an appeal before the AAC, contending that since the minor son did not get any immediate benefit, the provisions of s. 4(1)(a)(i) of the Act could not be applied. The AAC agreed with the said contention, but sustained the addition under s. 4(1)(a)(i) of the Act, as an asset transferred to the spouse of the assessee. 6. Not satisfied with the order passed by the AAC, the assessee filed an appeal before the Tribunal, contending that since the transfer was only to a trustee for the benefit of a minor child, it was not transferred to the spouse and, therefore, s. 4(1)(a)(i) of the Act could not be applied. On the other han ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve heard learned standing counsel appearing for the Department and we have also perused the records carefully. 10. The point for consideration is in a case, where the assets transferred by the grandmother for the benefit of her grandson by creating trust and appointing her spouse as the trustee, would be includible in the hands of the assessee, who is the grandmother, either under the provisions of s. 4 (1)(a)(i) or under the provisions of s. 4(1)(a)(v) of the Act. 11. Sec. 4(1) of the Act states that in computing the net wealth of an individual, there shall be included, as belonging to that individual, (a) the value of the assets on the valuation date are held (i) by the spouse of such individual to whom such assets have been transferr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is the grandmother, to her spouse, the provisions of s. 4(1)(a)(i) of the Act cannot be applicable to the facts of this case. 12. In so far as the provisions contained in s. 4(1)(a)(v) of the Act is concerned, it states as under : "In computing the net wealth of an individual, there shall be included, as belonging to that individual (a) the value of the assets which on the valuation date are held - (v) by the son's wife, or the son's minor child, of such individual, to whom such assets have been transferred by the individual, directly or indirectly, on or after the 1st day of June, 1973, otherwise than for adequate consideration.....". Sec. 4(1)(a)(i) of the Act cannot be made applicable to the facts of this case. The procedure as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot be made. Sub-cl. (v) of s. 4(1)(a) of the Act does not include the deferred benefit of the son's child. Therefore, the property transferred by the assessee, who is the grandmother in favour of her grandson, by creating a trust and appointing the spouse as the trustee can never be included as the net wealth in her hands for the assessment years under consideration either under the provisions of s. 4(1)(a)(i) as under the provision of s. 4 (1)(a)(v) of the Act. 13. Accordingly, we answer the question No. 1 referred to us in Tax Case Nos. 301 and 302 of 1984 in the negative and against the Department. Insofar as the question No. 2 referred to us in Tax Case No. 825 of 1984 is concerned, we answer the same in the affirmative and against th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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