9911796707
TMI Blog1986 (1) TMI 140X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment years 1973-74 to 1975-76 in which all the properties which had not been handed over to the legatees were shown as properties vesting in the executors on the relevant valuation dates. The assessment for all the three assessment years was completed on 17-3-1979. By letter dated 8-3-1979 the executors of the estate brought to the notice of the WTO the fact that under clause 3 of the will of the deceased the residuary estate after meeting the debts was to be merged with the corpus of the trust which had been created by the deceased in his lifetime by deed of settlement dated 23-12-1955. According to the executors of the estate, the estate of the deceased stood administered on 27-12-1966 when the estate duty had been paid. Consequent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t they did not file appeal against the assessment order for the assessment year 1972-73 because that assessment had been made under section 16(1) of the Act. The learned AAC held that the assessee was entitled to exemption under section 5(1)(i). He, therefore, cancelled the assessments of all the three years. In his order, he has not given separate reasons for cancelling the assessments and he appears to have accepted the submission made on behalf of the executors of the estate. The department has now come in appeals before us, and the common ground raised in all the three appeals is that the learned AAC had erred in holding that the assessee was entitled to exemption under section 5(1)(i) and, consequently, erred in cancelling the assessme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e agree that mere fact that in the income-tax assessments for these years, the income from the estate has been assessed in the hands of the executors and not in the hands of the charitable trust in question would not by itself disentitle the executors to raise the abovementioned plea in the wealth-tax proceedings. However, the fact that the executors filed returns in respect of income from the estate for all the three years and admitted their liability to be assessed as executors is a relevant fact. Mere fact that the estate duty was paid on 27-12-1966 would not result in vesting of the residuary property in the charitable trust. Until the residue is ascertained by transfer or assent to the residuary legatee or by appropriation, the residua ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a legacy of the residue, there is a further provision to the effect that the residue shall have to be ascertained for the assent to operate. So, until the residuary estate is ascertained and the executor assents in favour of the residuary legatee, the residuary legatee would acquire no interest in the property. During all this interval, the executor of the estate shall have to be charged as executor under section 19A of the Wealth-tax Act, in the wealth-tax assessments and under section 168 of the Income-tax Act, 1961, in the income-tax assessments and not as a trustee for any beneficiary under section 21A of the Wealth-tax Act and section 160(1)(iv) of the Income-tax Act, respectively. 5. In the present case, the executors of the estate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of the estate were not entitled to raise the plea in the present assessment proceedings to the effect that the property in question was exempt under section 5(1) (i). On the relevant valuation dates, the property in question vested in them as executors and they were liable to be assessed in the capacity of executors. 6. We may mention here that the executors had transferred a sum of Rs. 2 lakhs to the charities on 30-3-1973. Since this amount was transferred to the charitable trust before the relevant valuation date (31-3-1973) that amount was not treated by the executors as property held by them as executors. It is only after the properties were transferred to the said charitable trust that the property was treated as property of the c ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
