1. The first point, which is common to all these appeals, is whether the Commissioner (Appeals) is justified in deleting the assets in the name of Mrs. Sushila Daphtary and Mr. Anil Chander Daphtary Trust from the net wealth. Briefly stated, the facts are: The assessee, a leading jurist of the country and Solicitor General of India at the relevant time, created by a registered document dated 15-10-1951, executed on a stamp paper of the value of Rs. 2,362.50, a trust in favour of his unmarried daughters, Sunita and Leela, and appointed his wife, Smt. Sushila Daphtary, and major son, Shri Anil Chander Daphtary, as the trustees. The trust deed provided that the assessee, the settlor, was desirous of providing for his wife and children by settling upon a trust a sum of Rs. 2 lakhs. The said sum of Rs. 2 lakhs was, thus, settled on trust. The assessee earlier entered into an agreement on 26-7-1950 with one Ram Karan Chothmal Kedia for the purchase of an immovable property at Napean Sea Road, Bombay, and paid earnest money of Rs. 10,000. That amount also was settled on trust so that the total amount settled on trust was Rs. 2,10,000. The trust deed directed that the trustees shall complete the transaction of the purchase of the property of Napean Sea Road and hold it upon trust.
That property was, accordingly, purchased on 14-11-1952 in the name of the trustees for a sum of Rs. 2,15,000 and later on 15-10-1959 that property was sold for Rs. 2,53,000 and the amount was deposited in the bank account of the trust. The claim of the assessee before the WTO was that the property settled on trust did not any more belong to him and that it should not be included in his net wealth by reason of the application of Section 4(4) of the Wealth-tax Act 1957 ('the Act'). The WTO was, however, of a totally different view. The WTO interpreted the deed of trust as in the nature of a will, that the assessee derived benefit from the trust by taking a huge amount of loan free of interest to pay income-tax, which was more in the nature of a settlement made for the provision for maintenance of his wife and children. He, therefore, was of the opinion that the entire amount still belonged to the assessee as the beneficial owner of the trust property. Since at the relevant time, this property was sold for Rs. 2,53,000, he held that amount to represent the market value of the property and included that amount as the wealth of the assessee for all these years. The reasons that prevailed with the WTO to come to the above conclusions need not be narrated here for the present discussion. But, on appeal, the Commissioner (Appeals) had come to a totally different conclusion.
He held that whatever may be the conclusion to be drawn on an interpretation of the trust deed and the conduct of the assessee by taking a loan, etc., the fact remains that Section 4(4) excluded all the properties settled on trust, whether revocable or irrevocable, prior to 1-4-1956 from inclusion in the assessee's net wealth. Even if this trust was held to be a revocable trust, all the same it was a trust excluded by Section 4(4) and, consequently, the value of the property was not includible in the wealth of the assessee. He has given very elaborate reasons for his conclusion and he summed up his conclusions in paragraph 4.4 in the following terms: 4.4 In my view, the contention regarding the irrelevance of the application of Section 64 of the Income-tax Act to the question of the exemption of the impugned property under Section 4(4) of the Wealth-tax Act is well-taken. The expression 'transfer' as inclusively defined in Explanation (a) to Section 4 is wide in its sweep including even an 'arrangement', 'transfer' under Section 4, therefore, very clearly includes all types of transfers, which in a real, commercial and business sense amount to transfer, including revocable transfers. Section 126 of the Transfer of Property Act also recognises a revocable gift, in which the donor and donee may agree that on the happening of any specified event which does not depend on the will of the donor, the gift would be suspended or revoked. Explanation (b) to Section 4 of the Wealth-tax Act defines 'irrevocable transfer' and Section 4(1)(a)(iv) refers to a transfer of asset 'otherwise than under an irrevocable transfer'. Section 4(5) refers to 'irrevocable transfer'. The definition of 'irrevocable transfer' also underwent a clarificatory amendment with effect from 1-4-1965 by the Wealth-tax (Amendment) Act, 1964. The Legislature was, thus, very much alive to the distinction that exists in law between irrevocable and revocable transfers, both of which are undoubtedly transfers. However, Section 4(4) refers only to 'any such transfer' and Explanation (a) gives a very wide, sweeping and inclusive definition of 'transfer'. I have, therefore, no difficulty to accept the contention raised that even if the transfer to the trust on 15-10-1951 made by the assessee was a revocable transfer, he is entitled to the exemption under Section 4(4).
It will be seen from the neat summing up that the Commissioner (Appeals) has considered all the angles and came to the conclusion that the assessee could not have had any intention to pay wealth-tax when he created this trust; that Section 4(4) was introduced only with a view to provide exemption from the operation of the deeming provisions of Section 4(1)(a) to militate hardship by the introduction of the Act and that in any case the trust deed did not provide any indication to show that the transfer was revocable transfer. He has given as many as four reasons why the transfer could not be held to be irrevocable transfer.
He found that there was no express or implied power of revocation given to the settlor of the deed nor the settlor derived any benefit, direct or indirect, nor the deed contained any provision for the re-transfer, directly or indirectly, of the whole or any part of the assets or income therefrom to the assessee nor the deed gave the assessee a right to reassume power, directly or indirectly, over the whole or any part of the assets or income therefrom. All these findings are now challenged before us by the department by relying on some of the provisions of the trust deed.
2. The first point taken up by the revenue is that the assessee took a loan of Rs. 1,10,000 without interest on securities and that was a benefit derived by the assessee and, therefore, the transfer must be held to be a revocable transfer. First of all, we do not agree with this proposition that obtaining a loan without interest on securities amounted to deriving a benefit, directly or indirectly, by the assessee under the terms of the deed of the trust. If there is no term in the deed of the trust conferring a power on the assessee to derive any benefit, whether direct or indirect, the misuse of the power given by the settlor to the trustees cannot amount to a reservation of a provision in the trust deed to confer benefit, direct or indirect, on settlor. That may be a breach of trust, for which proceedings have to be taken separately under the relevant law. But it cannot be said that the terras of the deed of trust by the trustees provided for the conferment of a benefit on the assessee. This is also the view expressed by the Commissioner (Appeals) and what is more, he derived support for this view from a decision of the Madras High Court in the case of CIT v. EM. Gopalakrishna Kone  57 ITR 569. Thus, the contention of the department that the fact that the assessee took a loan 13 years after the creation of the trust free of interest amounted to a conferment of a benefit on him and, therefore, there was no trust and the properties belonged to the assessee, cannot be accepted. If this argument leads to the conclusion that the trust is revocable, then as rightly pointed out by the Commissioner (Appeals), even such a revocable transfer is excluded by the specific provisions of Section 4(4). The next point relied on by the department was that the trust property in Bombay was occasionally used as residence whenever the assessee happened to visit Bombay. The assessee used to reside no doubt in this building with his family in Bombay whenever he visited Bombay from Delhi where he was practising and was also employed as Solicitor General of India, if we are right. The deed of trust nowhere provided any right of residence to the assessee. Therefore, reliance on the mere occasional spells of stay in the property cannot be read as a reserving of a right to the assessee under the deed of trust for residence. If again this argument is used to show that there is a revocable transfer, then again by reason of the provisions of Section 4(4) even such a transfer is put beyond the reach of Section 4(1)(a). The department's reliance was on Clause 15(b) of the deed of trust, which provided that at the request of the settlor during his lifetime, the trustees may allow the whole or any part of the settled premises to be occupied by such persons as the settlor or the said Sushila Chandra Daphtary may direct free of rent or on such rents and on such terms and conditions as they may decide. This does not mean by any stretch of imagination that the settlor by this clause provided for himself a right of residence. Rightly, in our opinion, the Commissioner (Appeals) relied upon a decision of the Bombay High Court in the case of Ramji Keshavji v. CIT  13 ITR 105 to hold that even this did not amount to a right to reassume power, directly or indirectly, over the assets of the trust. Again in the case of CIT v. Jayantilal Amratlal  67 ITR 1, the Supreme Court pointed out that a provision enabling the settlor to give directions to trustees to employ the assets or funds of the trust in a particular manner would not tantamount to conferring a right on the settlor to reassume power over the income or the assets settled.
The reliance of the department on this clause to show that the assessee reserved a benefit of free residence in the property is only factually incorrect but even if correct, it does not militate against the application of the provisions of Section 4(4). Again, another point worthy of note here is that whenever the settlor stayed in the house, he did not do so in his capacity as the settlor but as the husband and father of the beneficiaries. The Commissioner (Appeals) in this context made reference to a decision of the Supreme Court in estate duty matter in the case of CED v. Umesh Rudra  117 ITR 579 and, in our opinion, very rightly. If such a strict interpretation is placed upon the provisions of Section 4(1)(a), as pointed out by the Supreme Court in that case, such an interpretation would subvert family life and social order and would be contrary to morality and good sense. Another point strongly relied upon by the revenue was that the beneficiaries were not known and their shares were not determinate on the ground that the settlor reserved to himself the power or the right to vary the shares of the beneficiaries. We have gone through Clause 3 of the trust deed and it nowhere states that the settlor has got the right to vary the shares of the beneficiaries. In this context, we would like to reproduce what the Commissioner (Appeals) on the subject has said: (i) Under Clause 3 of the deed, the net income of the trust for the duration of the life of the assessee and of Smt. Sushila Daphtary and of the survivor of them should be paid to Smt. Sushila Daphtary, Anil Daphtary, Sunita Daphtary and Leela Daphtary, viz., the wife, son and daughters of the assessee and the survivor/survivors of them in such shares as the settlor shall by writing or will 'appoint' and in default of any such 'appiontment' by the settlor to the said persons/survivors of them in equal shares. In my opinion, this clause very clearly identifies the beneficiaries and also specifies their shares at any point of time. The power given to the settlor to vary the shares of the beneficiaries by writing or by will does not, in any manner, render the trust invalid or void. This clause does not also give the assessee any economic control or power to use the income or assets of the trust for his own benefit.
We are in entire agreement with this view expressed by the Commissioner (Appeals) and in fact we may add here that the learned departmental representative was not able to throw any light to support the view of the department that the provisions of Clause 3 of the trust deed can be interpreted in a manner different from the way in which they were interpreted by the Commissioner (Appeals), with whom we agree, and that those provisions really meant to confer on the settlor, that is the assessee, the power to vary the shares of the beneficiaries. On the contrary, the shares of the beneficiaries are left in no doubt. They are very specific, determinate and never left vague.
3. Another point urged by the revenue was that the settlor had a right to appoint additional trustees. We do not see as to how this can militate against the validity of the trust or can lead to the conclusion that there was no transfer of the property to the trustees or the trust was in truth and in reality a will executed by the settlor, an argument used to convey the proposition that there was no transfer at all on 15-10-1951 when the alleged trust was created and as a consequence the case could be taken out of the purview of Section 4(4). Another argument strongly urged was that there are certain provisions in the trust deed which would curtail the right of the beneficiaries. Since that was contrary to the provisions of the Indian Trusts Act, 1882, it must be held that there was no transfer. Here again we are unable to subscribe to the view canvassed on behalf of the assessee. The Commissioner (Appeals) has dealt with this point very elaborately and lucidly and we can do no better than quote him: Curtailment of beneficiaries' rights under Sections 55, 56 and 58 of the Indian Trusts Act, 1882-- Section 55 operates 'subject to the provisions of the Instrument of Trust'. The rights under Section 56 can be specifically executed strictly in accordance with 'the intention of the author of the trust'. The illustrations to Section 56 clearly clarify this limitation. The trust deed does not contain any restriction contrary to Section 58 and even if it did so, only that provision would be void and not the entire trust. Further, the proviso to Section 58 deprives the assessee's wife of any power to transfer her interest during her marriage. Having regard to the terms of the trusts deed and the relevant provisions of the Indian Trusts Act, I am unable to agree with the WTO's criticism of the assessee's case on this account.
We are in entire agreement with this view and, if we may say, not one word can be deleted or added to what he said as either superfluous or as unwanting. Lastly, it was urged that Clauses 3, 4 and 5 of the trust deed give the impression that the settlor retained to himself the general power to disburse the beneficial interests of the assessee and, therefore, there was no transfer. This again is as wrong as advancing the argument that the beneficiaries were not known. In fact this argument is an extension of the earlier argument which we have disposed of. None of these arguments raised by the department can prove its case that there was no transfer at all on 15-10-1951 and that if at all there was any settlement, it was only in the nature of a will. We hold that the trust deed read as a whole coupled with the fact that it was acted upon, the conduct of the parties amply proved that there was a transfer on 15-10-1951 of the trust properties to the trustees and the trustees held the properties thereafter on trust and that even if at the worst it was held that this was a revocable trust, it was fairly governed by the exception provided in Section 4(4), which excluded from the operation of Section 4(1)(a) the transfers made of any kind before 1-4-1956. We are, therefore, in entire agreement with the Commissioner (Appeals) on this point and hold against the revenue. This is the first common point in all the appeals.
4. In fairness to the learned departmental representative, we may add that he placed reliance on a decision of the Bombay High Court in the case of Dady R.D. Wadia v. CIT  81 ITR 289 and a decision of the Delhi High Court in the case of O.N. Mohindroo v. CIT  99 ITR 583 only to show that there was a difference between the release and the transfer and if it is a release and not a transfer, it is not covered by the provisions of Section 4(4). We have already held that there is a transfer in this case and not a release and, therefore, we are not impressed with this argument of the revenue. In the case of Dady R.D.Wadia (supra), the Bombay High Court explained the distinction between the release and the transfer. In a release, the releasor merely releases his right, title and interest. It is really an unilateral act.
A transfer, on the other hand, needs two parties, the transferor and the transferee. In a transfer, the right, title and interest which the transferor has is transferred by him to the transferee. It is the cessation of the right in the transferor coupled with the creation of a corresponding right in the transferee. In the case of a release, however, the creation of right in another person may follow as a matter of law but not by reason of the release effected by the releasor. The expression 'transfer' has been explained for the purpose of Section 4(1)(a) as including any disposition, settlement, trust, covenant, agreement and arrangement. Though the word 'release' is not used in this Explanation, it is, as explained by the Bombay High Court, an unilateral act and a trust, a covenant, an agreement or an arrangement can all be unilateral acts covered by the word 'transfer'. Though a release may not be a transfer as explained by the Bombay High Court in this case, it cannot be that release in that sense is excluded from the meaning of the word 'transfer' as explained in Section 4(1)(a). This Explanation uses the word 'trust'. In the case of a trust, the settlor transfers the property to the trustees and then the trustees hold the properties on trust. If there is no transfer, there is no trust. In this case there is nothing to indicate that there was no transfer of the sum of Rs. 2,10,000 to the trustees. There is any amount of evidence to prove that the said sum of Rs. 2,10,000 was transferred by the settlor, the assessee, to the trustees. The interpretation of the covenants of the trust may lead to a conclusion, assuming in favour of the revenue, that there is a revocable transfer but even so Section 4(4) excludes all transfers made before 1-4-1956 from the operation of the provisions of Section 4(1)(a). This argument is, therefore, in our opinion, not validly taken.
5. The next common ground is whether the prohibition contained in Section 2(m)(iii)(b) of the Act applies only to cases in which the order of the assessment was passed and if there was no order of the assessment, whether the amount of tax due could be said to be outstanding for more than 12 months. The amounts outstanding by the assessee towards taxes on various dates is all given in the order of the Commissioner (Appeals) and we do not have to refer to them except to state whether on principle he is justified in holding that the assessee is entitled to deduct that tax on the ground that they are not outstanding for more than 12 months because there was no order of assessment. This point has now been concluded by the decision of the Supreme Court in the case of CWT v. J.K. Cotton Mfrs. Ltd.  146 ITR 552. Since the facts are not in dispute, we hold that the view taken by the Commissioner (Appeals) is absolutely correct and we uphold it. However, the Commissioner (Appeals) in paragraph 9.5 of his order at page 52 gave certain guidelines to the WTO to determine the income-tax liability and then allow only such amount. Since those guidelines are not in dispute, we approve of it. In fact we are not called upon to express any opinion on that aspect of the order of the Commissioner (Appeals).
6. The next common ground is that the Commissioner (Appeals) was not justified in holding that the assessee is entitled to the deduction in respect of the income-tax liability determined under the Voluntary Disclosure of Income and Wealth Act, 1976. This point has to be decided in favour of the assessee and against the revenue following with respect the decision of the Delhi High Court in the case of CWT v. Raj Paul Chawla  117 ITR 574.
7. The next common objection relates to allowing exemption of a fraction in respect of the car, which was used partly for business purposes, i.e., profession and partly for personal purposes. Now that motor car is, admittedly, used both for profession as well as for personal purposes, the entire amount should be exempted partly because it was used for professional purposes and, therefore, it comes within the meaning of professional tour and partly because it was used for personal purposes and, therefore, it was personal effect. In either case, since the Commissioner (Appeals) allowed the exemption of a fraction of the value of the car, we do not see any injustice in this regard. We uphold his view.
8. The next common objection taken is against the allowing of exemption in respect of the library owned by the assessee under Section 5(1)(xii) of the Act. We now find that the Tribunal in the case of WTO v. Smt.
Shyamla Pappu  4 ITD 633 (Jab.) held that the library used by an advocate is exempt from the levy of wealth-tax under Section 5(1)(xii).
Following with respect the decision of the Tribunal, with which we agree, we hold that the view taken by the Commissioner (Appeals) is correct and we affirm it.
9. The next common ground urged was that the Commissioner (Appeals) was wrong in holding that one-third of Chincholi property situated at Bombay was agricultural property and, consequently, exempt from wealth-tax. We now find that this issue is fully covered by the order of the Tribunal, Bombay Bench 'C', in the case of the assessee in IT Appeal Nos. 2927, 2996 and 3271 (Bom.) of 1980, a copy of which is made available to us forming part of the paper book at pages 227 to 231.
Following with respect the assessee's own case, we hold that the view taken by the Commissioner (Appeals) on this point is correct and we affirm it.
10. There is another point common to the assessment years 1964-65 to 1974-75 only relating to the deduction of Rs. 1,10,000 as a liability.
That was the loan taken by the assessee on 3-4-1964 from the trust for payment of income-tax liability. The WTO disallowed this liability consistent with his finding that the trust was not a separate entity and that the trust property belonged to the assessee. Since the Commissioner (Appeals) did not agree with this view and held that the trust property was separate and did not belong to the assessee, he held that the liability was allowable as a deduction. It is this decision that is now contested before us. Since we have agreed with the view of the Commissioner (Appeals) that the trust was a valid trust, a separate and distinct entity and that the trust property did not belong to the assessee, we hold that he is eminently justified in allowing as a logical consequence that the liability of the assessee is to be deducted.