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TMI Blog1982 (8) TMI 69X X X X Extracts X X X X X X X X Extracts X X X X ..... of the assessee. According to the Commissioner the net wealth of the estate of the deceased person is chargeable to tax under section 19A of the Act and in computing the net wealth of the deceased person taxable in the hands of the executors, one-third value of the wealth in both movable and immovable properties was not taxed in the hands of the executors by the WTO on the ground that the religious trust had vesting interest in one-third share of the property in terms of a will executed by the testatrix in August 1951. Notice was issued to the assessee and after hearing them the orders of the WTO were set aside and direction was given to him to reframe the said orders for the assessment years under appeal as per law. Being aggrieved the assessee came in appeal before us. 3. The submission of the learned Advocate General for the assessee before us was that Smt. Bai Manek, widow of Sheth Jamnabhai Bhagubhai, executed a will dated 25-8-1951 and a codicil dated 3-11-1952. She died on 5-12-1952. Under the will she authorised the executors to make some cash bequeathed after payment of tax of the estate and further it is stated in the will that the three sons of Bababhai and two sons of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rat High Court in the case of Navnitlal Sakarlal's case. The section involved was 168 of the Income-tax Act, 1961 ('the 1961 Act') which is identical to section 19A of the 1957 Act. Therefore, the existence of section 19A does not make any difference on the real issue. He further submitted that a note was submitted to the Commissioner and along with that details were given for the property distributed. The same has not been considered by the Commissioner. If that was properly looked into, there would have been no case for setting aside the assessment orders. The learned Advocate General also pointed out that the income of the trust was excluded from the income of the assessee and on the same analogy the wealth should also be excluded from the wealth of the assessee and the wealth vested in the assessee is exempt under section 5(1)(i) of the Act. Therefore, one-third value of the wealth representing the share of the religious trust in the estate is required to be deducted in computing the net wealth of the assessee and, therefore, the orders of the WTO were correct. The order of the Commissioner should be set aside. 4. On the other hand, the contention of the learned departmental ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x right in the share of commission from Jamnabhai Manukhbhai, managing agents of Gujarat Spinning and Weaving Co. Ltd. Clause 9 provides for Shabibag bungalow. Later on in a codicil it is provided that Bababhai will live in Shahibag bungalow for his lifetime and Rs. 4,000 should be given to him for the maintenance of the said bungalow per mensem. Bababhai was supposed to receive Rs. 4,000 per mensem till his death, i.e., till 1959, and thereafter the bungalow was occupied by his children and finally it was handed over in 1970 to the trust. Apart from this, a list was attached to the will wherein different amounts were mentioned which were to be given to different persons after distribution of the property as directed by the testatrix. In, sub-clause (10) of clause 6 it is stated that the property equivalent to 4 annas in a rupee of 16 annas of the properties that may remain over after making the disposition as directed hereinabove in the will shall be settled on a trust by the name Sheth Jamnabhai Bhagubhai Religious Trust. It means that if the remaining property is to be at 16 annas, 4 annas property should be given to the trust, 6 annas to the three sons of brother Bababhai, two ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uran Singh wherein the provisions of section 168 of the 1961 Act which are analogous to the provisions of section 19A of the 1957 Act are discussed. In that case there was only a sole beneficiary who was the executor also. The interest was ascertainable in such a case but their Lordships have observed as under : " The assessment in respect of the income from the estate of the assessee's father for the period from May 18, 1970 to December 31, 1970, had been correctly assessed in his hands separately as an executor under the mandatory provisions of section 168 by the ITO and that income was not includible in his personal assessment. The Commissioner's order had been rightly set aside. " The above observation shows that unless there is a complete distribution of administration, property should be assessed in the hands of the executor. In Navnitlal Sakarlal's case while applying section 168(3), there Lordships have pointed out that the conclusion of the Tribunal is due to a mixing up of two concepts. One is the concept under the general law and the other is the concept under section 168(3). The fact that the executor, ie., the person who is actually administering the estate of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the property in the legatee can be inferred from the conduct of the parties and other facts and circumstances of the case. The assent of the executor can be inferred when there is clearly nothing more to be done by way of administration. " From the above observations it appears that the existence of debts or liabilities of the deceased is no bar for an executor giving assent in favour of the residuary legatee and that assent can be inferred from the conduct of the parties and other facts and circumstances of the case. But the assent of the executor can be inferred when there is clearly nothing more to be done by way of administration. The above facts and law show that under section 19A there must be a complete distribution of the assets to the beneficiaries of the estate and that portion only can be deducted from the wealth of the assessee but the view taken by their Lordships of the Gujarat High Court in Navnitlal Sakarlal's case is that if the administration had reached such a point that one could infer that the residuary estate had been ascertained or was easily capable of being ascertained in that case, it is open to the WTO to proceed against the residuary legatee. In this c ..... 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