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TMI Blog1980 (3) TMI 22X X X X Extracts X X X X X X X X Extracts X X X X ..... xpenses in connection with the management and administration of the trust. Clause 2 of the trust deed, on the construction of which the decision of this reference depends, reads as follows : " The trustees shall until the vesting date, which shall be on the expiration of ten years from the date hereof, stand possessed of the settled premises to accumulate the net income thereof in the way of compound interest by investing the same and the resulting income thereof from time to time in any investments hereby authorised for the investment of the settled premises and shall add the accumulations to the capital of the settled premises. From and after the vesting date, the trustees shall stand possessed of the settled premises together with accr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... interest as defined in s. 21 of the Transfer of Property Act. He held that the fact that the income of the trust was to be accumulated for the period of 10 years did not make any difference to the position that the assessee had a vested interest. In the appeal before the Tribunal, the Tribunal found that the trust deeds created a contingent interest and not " a beneficial interest in possession in the corpus and accretion thereto " in favour of the assessee. The Tribunal took the view that the trustees were to transfer and hand over the corpus of the trust fund, including the accretion thereto, to the assessee absolutely if he was alive on the expiry of the tenth year from the date of the execution of each of the trust deeds. It appears ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uestion fell within the period of 10 years, during which the trustees were merely to accumulate the trust fund and according to the learned counsel, since the interest of the assessee came into being for the first time on the expiry of the period of 10 years from the execution of the trust on the relevant dates, namely, 31st March, 1960, 29th March, 1961, and 28th March, 1962, the assessee cannot be said to have any beneficial interest in the corpus of the trust on the valuation dates. It is difficult to accept the contention of the assessee that the beneficial interest created by the trust deeds was not in the nature of a contingent interest. A contingent interest as defined in s. 21 of the Transfer of Property Act is an interest created o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that case held that under the trust, on the relevant date, Hansabai would be entitled to the entire trust fund and the heirs of Tribhuwandas according to law would have a contingent interest in the corpus of the trust property. It was pointed out that Hansabai had only the interest given to her in the net income and had no right in the corpus of the property, whereas the son of Nanalal, Tribhuwandas's brother, had on the relevant date a contingent interest in the corpus of the trust property as an heir of Tribhuwandas, contingent upon Hansabai " ceasing to be the wife or widow of Tribhuwandas" which contingency would also cover the case of her death. The facts of the present case clearly show that the only person for whose benefit the inco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The provision in cl. (v) is a special provision made for the purposes of wealth-tax, and, therefore, when that provision refers to the interest being available for a period not exceeding six years, in our view, that clause will be applicable only where it is possible to be positively established on record on such material as is available, that the assessee is not entitled to enjoy the beneficial interest for a period exceeding six years. On the mere possibility of the assessee not being alive beyond six years from the vesting date provided in the trust deeds, his case will not fall within cl. (v) of s. 2(e)(1). This contention must, therefore, be rejected. In the view which we have taken, all the three questions will have to be answered ag ..... X X X X Extracts X X X X X X X X Extracts X X X X
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