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Commissioner of Wealth Tax Vs. Mehra S. Cambatta - Court Judgment

LegalCrystal Citation
SubjectDirect Taxation
CourtMumbai High Court
Decided On
Case NumberW.T. Ref. No. 20 of 1971
Judge
Reported in(1980)18CTR(Bom)195
ActsWealth Tax Act, 1957 - Sections 2(e)(iv)
AppellantCommissioner of Wealth Tax
RespondentMehra S. Cambatta
Excerpt:
- .....was upheld by the aac. the tribunal took the view that the periodical payment was akin to an annuity and that the terms of settlement can be taken to preclude commutation of any portion of it by the trustees. the correctness of this view of the tribunal is put in issue in the question referred. it is obvious that the answer to the questions must be in the negative in view of the decisions of the supreme court in cwt v. arundati balkrishna. the question is accordingly answered in the negative and in favour of the revenue.3. no order as to costs.
Judgment:

Chandurkar, J.

1. The question referred to us at the instance of the Revenue is as follows :

'Whether, on the facts and in the circumstances of the case, the right of the assessee to receive income from the trust settlement created by the husband is exempt in view of s. 2(e)(iv) of the WT Act ?'

2. The relevant provisions in the Trust Deed executed by the husband of the assessee contain directions to the trustees that after the death of the settlor, the trustee shall hold the corpus and accumulated income and out of the moiety of the corpus held in trust for the benefit of the assessee, the trustees were to pay the net income thereof to the assessee during her lifetime or until her re-marriage, whichever is earlier. The contention of the assessee was that the provision was in the nature of an annuity. The life interest of the assessee was valued by the WTO and the valuation was upheld by the AAC. The Tribunal took the view that the periodical payment was akin to an annuity and that the terms of settlement can be taken to preclude commutation of any portion of it by the trustees. The correctness of this view of the Tribunal is put in issue in the question referred. It is obvious that the answer to the questions must be in the negative in view of the decisions of the Supreme Court in CWT v. Arundati Balkrishna. The question is accordingly answered in the negative and in favour of the Revenue.

3. No order as to costs.


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