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TMI Blog1975 (7) TMI 54X X X X Extracts X X X X X X X X Extracts X X X X ..... ere respectively settled upon trusts and transferred to the trustees for the benefit of his two minor daughters. After the trusts were created the trustees out of the trust funds purchased shares. On the valuation date the trust funds were held in shares of which the valuation was Rs. 75,610. In determining the wealth tax payable by the assessee who is the settlor, the Wealth-tax Officer took the view that it is the market value of the shares on the valuation date that was to be included in the net wealth of the assessee and he accordingly included the sum of Rs. 75,610 being the market value of the shares as part of the net wealth held by the assessee. The contention on behalf of the assessee that merely the original sum of Rs. 46,302 whic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that under section 4(1)(a) it is the value of the assets which on the valuation date are held that is to be included in the net wealth of the assessee irrespective of the fact that the assets may have been converted after the transfer was effected by the assessee, the settlor. He submitted that whenever the assets transferred are converted into a different kind of property it is the value of the converted type of property that is to be taken into account as on the valuation date and not the value of the assets transferred as on the valuation date. Under the charging section 3 tax is to be levied in respect of the net wealth of the assessee on the corresponding valuation date. Under that section, subject to the other provisions contained ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the assessee but which are to be computed as part of his wealth are enumerated in section 4 and we are concerned with the provisions of section 4(1). They are as under : " 4. (1) In computing the net wealth of an individual, there shall be included, as belonging to that individual-- (a) the value of assets which on the valuation date are held--........... (iii) by a person or association of persons to whom such assets have been transferred by the individual otherwise than for adequate consideration for the immediate or deferred benefit of the individual, his or her spouse or minor child (not being a married daughter) or both, or ...... whether the assets referred to in any of the sub-clauses aforesaid are held in the form in which t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lause (a). Sub-clause (i) deals with the assets transferred to the spouse of an individual and there also reference is made to " such assets have been transferred by the individual ". The use of the expression "such assets" really indicates that it is the assets in the original form that are to be taken into accournt because those are the only assets which are transferred by the assessee as the transferor. Identical language is used in sub-clauses (ii) and (iii). We are concerned in the present case with sub-clause (iii). It should not be overlooked that there is no article used before the word "assets" in clause (a) in the expression "value of assets which on the valuation date or transferred". The identification of "such assets" is to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , then naturally irrespective of the fact whether the transferees like the trustees retain the same assets transferred in the form in which they were settled upon trust or invest them in other properties, still for the purposes of section 4(1)(a)(iii) it is the value of the original assets that has to be taken into account and not the value of the assets into which it is converted. If the legislature intended the value of the converted assets which came into existence after the original transfer, the appropriate language would have been used by the legislature especially when under this section the property is deemed to be included in the net wealth of the assessee. In the absence of clear and explicit provisions it is not possible for us t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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