9911796707
TMI Blog1981 (7) TMI 11X X X X Extracts X X X X X X X X Extracts X X X X ..... d in this reference has also been raised in Wealth-tax Reference No. 18 of 1976, where also Keshavlal Punjaram others as legal heirs of Partivkumar Harshadkumar are the assessees. Since an identical question is involved in these allied matters, it will be convenient to dispose of both these matters by this common judgment. We will first deal with the question which is common in I.T.R. No. 66/77 and W.T.R. No. 18176 (being question No. 1 out of the four questions in I.T.R. No. 66/77 and the only question in W.T.R. No. 18176, though it is worded slightly differently). The said question reads as under : LT.R. No. 66/77 : " Whether, on the facts and in the circumstances of the case, the Tribunal was justified in law in concluding that Shri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of modification, executed in 1940, i.e., some 12 years after the execution of the original document, the provision made for payment of income of the trust to H was deleted and it was instead provided that income of the trust funds should be accumulated during the lifetime of the settlor. It was further provided that after the lifetime of the settlor the net income was to be paid to H for and during his life and down to his death. By the second modification, as per the last document executed in 1948- as per annex. C- the settlor directed that the trust funds shall be held in trust for the said H " for the life and for his heirs, executors, administrators and assigns absolutely ". The relevant portion may be reproduced for the sake of preci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he intention of the settlor has been to confer life interest (and nothing beyond life interest) on H. At one point of time the original direction to pay the income of the trust fund to H was modified and it was directed that the income should be accumulated during the lifetime of the settlor and should be paid to H only after the lifetime of the settlor and the only benefit conferred upon H was to receive the income of the trust fund during his lifetime (lifetime of H). At no point of time an absolute interest has been conferred upon H. So far as the legal heirs of H are concerned, the intention of the settlor has been to make a provision for holding the trust fund for their benefit. In the original trust deed no provision was made to make ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... H which would of necessity come into existence on the termination of the life of H. There can be no question of the heirs of H during his lifetime. This is another reason why the provision cannot be interpreted in any other manner. In our opinion, there is no room for doubt that the view taken by the Tribunal is the correct view. Under the circumstances, the said question is answered in the affirmative and against the assessee both in I.T.R. No. 66/77 as well as in W.T.R. No. 18/1976. We are now concerned with the three questions referred to us for our opinion, being questions Nos. 2, 3 and 4 in I.T.R. No. 66/77. So far as question No. 2 is concerned, it reads as under : " Whether, on the facts and in the circumstances of the case, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... TO makes it abundantly clear that he was making the assessment in respect of 1/4th income, included by the assessee only as a protective measure because the assessee himself had included the said income in his return. Al the same time he made it clear that the trust was being assessed as an AOP and the question of including this income in the assessment of H did not arise except by way of Protective measure. It is, therefore, futile to contend that the ITO had exercised the option under s. 166 of the Act. The view taken by the Tribunal is unexceptionable. The question is, therefore, answered in the affirmative and Against the assessee. So far as the third question is concerned, it reads as under : "Whether, on the facts and in the circu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... we answer this question in the affirmative and against the assessee. So far as question No. 4 is concerned, it is not necessary to answer this question. In view of our answer to question No. 1, this question does not survive. We, accordingly, answer the reference in the following manner: I.T.R. No. 66/1977 : Question No. 1 : In the affirmative and against the assessee. Question No. 2 : In the affirmative and against the assessee. Question No. 3 : In the affirmative and against the assessee. Question No. 4 : Not necessary to answer as this question does not survive in view of the answer to question No. 1. W.T.R. No. 18/1976: " Whether, on the facts and in the In the affirmative and against circumstances of the case, the Appella ..... X X X X Extracts X X X X X X X X Extracts X X X X
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