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TMI Blog1980 (10) TMI 50X X X X Extracts X X X X X X X X Extracts X X X X ..... ed deposit under section 5(1)(xxvi) of the Wealth-tax Act, 1957, for the assessment year 1973-74 ? 2. Whether, on the facts and in the circumstances of the case, the assessee is entitled to any exemption under section 5(1)(iv) of the Wealthtax Act for the assessment years 1973-74, 1974-75 and 1975-76 ? " The assessment year with which we are concerned is the year 1973-74. The assessee is a minor and she was assessed to wealth-tax through her father as guardian. The minor, assessee, is a beneficiary in a private trust called " Seematti Trust ". She is interested to the extent of 18% in the income and assets of the said trust. The Seematti Trust had deposits in various banks amounting to Rs. 3,16,428. In the return filed by the assessee, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... allowed by cl. (xxvi) of subs. (1) of s. 5. Accordingly, the Tribunal allowed the appeal filed by the assessee and held that the assessee was entitled to the deduction of her share in the fixed deposits by virtue of the exemption conferred by s. 5(1)(xxvi) of the Act. This reference has been made by the Tribunal at the instance of the revenue. Counsel appearing on behalf of the revenue strenuously argued that sub-s. (3) of s. 5 of the Act, as it stood at the relevant time, made it clear that the assessee would not be entitled to the benefit of exemption under cl. (xxvi) of sub-s. (1) of the said section unless the asset in question was " held by the assessee " for a period of at least six months ending with the relevant valuation date. C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his name and not the certificates of which beneficial ownership is vested in him but which stand in the name or names of his nominee or nominees. We consider that the scope of the aforesaid observations has to be restricted to cases where the claim for exemption is put forward in respect of assets allegedly held benami in the names of others. Counsel for the revenue, however, urged that this decision is an authority laying down that an asset in the nature of a bank deposit cannot be regarded as one " held by the assessee " unless the deposit receipt stands in the name of the assessee. It is true that there are some observations in the judgment of the Gujarat High Court which lend support to the aforesaid argument put forward by the counsel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the trustee in respect of assets held by him on behalf of the beneficiary is to be made on the basis of a statutory fiction that the assets concerned are held by the beneficiary in his direct ownership. The same fiction has to be applied while making an assessment directly against the beneficiary under sub-s. (2) of the section. Hence, when an assessment is made under s. 21 of the Act either against the trustee or directly against the beneficiary in respect of assets which form the subject-matter of a trust, the asset in question, to the extent to which the beneficiary has a beneficial interest therein, is to be deemed to be " held " by the beneficiary. We do not see how r. 2 of the W.T. Rules gets attracted to a case like the present on ..... X X X X Extracts X X X X X X X X Extracts X X X X
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