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TMI Blog1984 (5) TMI 62X X X X Extracts X X X X X X X X Extracts X X X X ..... peal is with regard to Peter Luis Trust. One of the properties of the said trust is situated at 8, Turner Road, Bandra, Bombay. The assessee claimed that valuation of the said property should be made under section 7(4) of the Wealth-tax Act, 1957 ('the Act') because the said property was in occupation of the trustee, who had life interest, and all the beneficiaries. The WTO was of the opinion that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that commission of the said mistake did not justify commission of a similar mistake in the wealth-tax proceedings. He declined to interfere in the order of the WTO. 3. The crucial question for decision is whether provisions of section 7(4) would apply to the trust property. The essential condition under section 7(4) is that the house in question should belong to the assessee and should be excl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ust, the assessees are living persons. 4. In Bai Hamabai J.K. Mehta v. CIT [1948] 16 ITR 115, the Bombay High Court held that where the beneficiary under a trust was entitled to reside rent-free in a property and under section 41(2) of the Indian Income-tax Act, 1922 ('the 1922 Act'), the income-tax authorities assessed the said beneficiary directly in respect of the income from the property, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... idential purpose'. In that case, the house in question had been settled on a trust and the beneficiaries had been residing in the said house. The contention before the High Court was that the house belonged to the official trustee and since the official trustee was not residing in the said house, exemption under section 5(1)(iv) could not be granted. The High Court rejected this contention. It was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under section 7(4) would be admissible. In the circumstances, we restore the matter to the WTO with the direction to grant exemption under section 7(4), if he finds that the house in question was being used for residence during the relevant period by the persons who were beneficiaries under the trust deed. Relevant enquiries shall be made by the WTO after giving opportunity of being heard to the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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