Suhas Chandra Sen, J.
1. The assessee in this case is the official trustee of West Bengal for Trust Murshidabad Estate. The case relates to the assessment years 1964-65 to 1971-72, the corresponding valuation dates being 31st March immediately preceding each assessment year. The WTO in the wealth-tax assessment proceeding allowed exemption under Section 5(1)(iv) of the W.T. Act, 1957, up to Rs. 1 lakh in respect of a part of the building at 85, Park Street, Calcutta. The WTO held that the building was used partly for the residential purpose of the beneficiaries.
2. The AAC, however, held that the assessee was not entitled to the exemption as the building in question vested in the trustee to be held by him in trust. According to him, one of the beneficiaries was allowed to use and occupy the premises No. 85, Park Street, Calcutta, but the property did not belong to such beneficiary and the conditions laid down in Section 5(1)(iv) of the W.T. Act had not been satisfied in this case.
3. The assessee preferred an appeal to the Tribunal against the order of the AAC. The Tribunal held that the AAC was wrong in coming to the conclusion that the assessee was not entitled to the exemption under Section 5(1)(iv) of the W.T. Act.
4. At the instance of the Commissioner of Wealth-tax, West Bengal-Ill, the following question of law has been referred to the High Court:
'Whether, on the facts and in the circumstances of the case, the assessee is entitled to exemption under Section 5(1)(iv) of the Wealth-tax Act, 1957, in respect of a part of the house at 85, Park Street, Calcutta, relating to the assessment years 1964-65 to 1971-72 ?'
5. This case involves an interpretation of Sections 2(c) and 5(1)(iv) of the W.T. Act, the relevant portions of which are set out hereunder:
'2. (c) 'Assessee' means a person by whom wealth-tax or any other sum of money is payable under this Act, and includes-
(i) every person in respect of whom any proceeding under this Act has been taken for the determination of wealth-tax payable by him or by any other person or the amount of refund due to him or such other person ..,... '
' 5. (1) Subject to the provisions of Sub-section (1A), wealth-tax shall not be payable by. an assessee in respect of the following assets, and such assets shall not be included in the net wealth of the assessee--......
(iv) one house or part of a house belonging to the assessee......'
6. The revenue's case before this court is that the assessee is not entitled to the benefit of exemption under Section 5(1)(iv) in respect of the property at 85, Park Street, Calcutta, in this case. The language of Section 5(1)(iv) clearly postulates that relief can be granted only in respect of one house or part of a house belonging to the assessee exclusively used by him for residential purposes. In this case the house at 85, Park Street, Calcutta, belongs to the official trustee and the official trustee does not use it for residential purposes and, therefore, the relief in question cannot be granted to the assessee. The assessee in this case is the official trustee and not the beneficiary.
7. The argument advanced on behalf of the revenue, however, overlooks the basic fact that a trustee is assessed under the scheme of the W.T. Act only as a representative assessee although for certain purposes of the Act a trustee is an assessee. Section 21 of the W.T. Act makes it clear that wealth-tax shall be levied upon a trustee and is recoverable from the trustee in the like manner and to the same extent as it would be leviable upon and recoverable from the person on whose behalf or for whose benefit the assets are held. Section 21(2) also provides that the WTO can make a direct assessment on the beneficiary and recover the tax from the beneficiary in respect of the assets held under trust. The WTO,therefore, has an option either to assess the beneficiary directly or to assess the trustee in respect of the assets held under trust. The Act does not envisage that when an assessment is made on a trustee the incidence of tax will be heavier. This is clearly provided by the expression 'in the like manner and to the same extent' used in Section 21 of the Act. The logical conclusion of the revenue's case will be that if an assessment is made directly on the beneficiary, the beneficiary will be entitled to the exemption under Section 5(1)(iv) on the ground that the assets included a house or part of a house belonging to the assessee and exclusively used by him for residential purposes. But if the assessment is made on the trustee, as in this case, this benefit will be denied because the trustee has not personally used the house or a portion thereof for residential purposes. This runs counter to the clear provisions of Section 21 of the Act.
8. In construing similar provisions of law under the Indian I.T. Act, 1922, it was held by P.B. Mukharji J. (as his Lordship then was), in the case of Ganesh Chandra Dhar v. CIT : 35ITR84(Cal) :
'The very word 'assessee' has got its meaning in the context of the Act. Sub-section (2) of Section 2 of the Income-tax Act, defining ' assessee', says that it means a person by whom income-tax or any other sum of money is payable under this Act and includes every person in respect of whom any proceeding under this Act has been taken for the assessment of his income. Section 29 of the Income-tax Act dealing with the notice of demand uses the expression 'assessee or other person liable to pay such tax'. The other person may be any person whose liability is provided for in the Income-tax Act. Among such other persons it is obvious that the receiver is expressly said to be in the like manner and to the same amount as it would be leviable and recoverable from the beneficiary, that is, the applicant in this case. The receiver, therefore, is a notional assessee and the beneficiary is the real assessee. Section 41(2) makes the position further clear that even where there is a receiver, there may be a direct assessment on the beneficiaries or there may be direct recovery from the beneficiaries although the assessment was in the name of the receiver.'
9. Counsel for the revenue has relied on the case of CIT v. Ganga Properties Ltd. : 77ITR637(Cal) and contended that under the Indian law, a trustee is the full owner of the property and the distinction between 'beneficial ownership' and 'legal ownership' is unknown to Indian law.
10. It has further been contended that the expression 'belonging to' in Section 5(1)(iv) denoted absolute ownership. Therefore, residence of one beneficiary in the property did not bring the case of the assessee within the ambit of Section 5(1)(iv) of the W.T. Act. For this proposition reliance has been placed on the decision in the case of CED v. Estate of Late SankaSimhachalam : 99ITR370(AP) . Reliance has also been placed on the judgment of the Supreme Court in the case of Raja Mohammad Amir Ahmad Khan v. Municipal Board of Sitapur, : AIR1965SC1923 .
11. Counsel for the revenue also relied on the judgment of the Bombay High Court in the case of Bai Hamabai J.K. Mehta v. CIT : 16ITR115(Bom) , and contended that since, in the instant case, the trustee was assessed to wealth-tax, the residence of the beneficiary did not bring the case within the ambit of Section 5(1)(iv) of the Act. But in that case the question whether the expression 'owner' in Section 9(1) of the Indian I.T. Act, 1922, meant the legal owner or the beneficial owner was left open by the Bombay High Court. The Bombay High Court in that case held that in a case where the beneficiary was assessed to tax under Section 9 of the Indian I.T. Act, 1922, as owner of the property held under trust, he was entitled to claim relief under Section 9(2) of the Act.
12. In our opinion, the reliance placed in the case of CIT v. Ganga Properties Ltd. : 77ITR637(Cal) is misplaced. In that case Section 9 of the Indian I.T. Act, 1922, came up for consideration. The assessee had entered into an agreement for sale on April 28, 1956. The deed of conveyance transferring the property was executed on 17th March, 1958, and was registered on 8th July, 1958. The question was whether under Section 9 of the Indian I.T. Act, 1922, the income from the property was assessable in the hands of the purchaser on loan as the agreement for sale was made even before the deed of conveyance was executed and/or registered. It was argued in that case that the contract to purchase gave the purchaser an equitable estate and the purchaser was the owner of the property right from the date of the agreement for sale and, therefore, the purchaser should be assessed under Section 9 as owner of the property even before the deed of conveyance was executed and/or registered. In that content, it was held that in Indian law, beneficial ownership was unknown and there was only one owner, namely, the legal owner both in respect of the vendor and the purchaser. This judgment, in our opinion, is not an authority for the proposition that for the purpose of assessment under the W.T. Act, trust properties belong to the trustees within the meaning of Section 2(m) and Section 5(1)(iv) of the W.T. Act. The case of CED v. Estate of Late Sanka Simhachalam : 99ITR370(AP) also does not support the contention of the revenue. In that case, it was held that the words 'belonging to' in Section 33(1) of the E.D. Act, denoted absolute ownership; but it included also the possession of an interest less than that of full ownership if the context so required.
13. The question in this case is whether the assets held under trust can be described as assets 'belonging to' the trustee. The Supreme Courthas held in the case of CWT v. Trustees of H.E.H. Nizam's Family (Remainder Wealth) Trust : 108ITR555(SC) thus :
'This provision obviously can apply only where the trust properties are held by the trustee for the benefit of a single beneficiary or, where there are more beneficiaries than one, the individual shares of the beneficiaries in the trust properties are determinate and known. Where such is the case, wealth-tax can be levied on the trustee in respect of the interest of any particular beneficiary in the trust properties 'in the same manner and to the same extent' as it would be leviable upon the beneficiary and in respect of such interest in the trust properties, the trustee would be assessed in a representative capacity as representing the beneficiary. This, of course, does not mean that the revenue cannot proceed to make direct assessment on the beneficiary in respect of the interest in the trust properties which 'belongs to' him. The beneficiary would always be assessable in respect of his interest in the trust properties, since such interest 'belongs to' him and the right of the revenue to make direct assessment on him in respect of such interest stands unimpaired by the provision enabling assessment to be made on the trustee in a representative capacity. Sub-section (2) makes this clear by providing that nothing contained in Sub-section (1) shall prevent either the direct assessment of the beneficiary for whose benefit the trust properties are held or the recovery from the beneficiary of the wealth-tax in respect of his interest in the trust properties which is assessed in the hands of the trustee.'
14. The case of Raja Mohammad Amir Ahmad Khan v. Municipal Board of Sitafiur : AIR1965SC1923 , does not advance the case any further. In that case, the Supreme Court pointed out that the expression 'belonging to' has to be construed in the context in which it appeared. In the context of the provisions of the W.T. Act, in our opinion, it cannot be said that thetrust properties in this case belonged to the official trustee within the meaning of Section 5(1)(iv) of the W.T. Act, and that the residence of one of the beneficiaries of the trust will not bring the case within the scope ofSection 5(1)(iv) of the W.T. Act.
15. We are of the opinion that in this case the question referred has to be answered in the affirmative and in favour of the assessee. There will be no order as to costs.
Sabyasachi Mukharji, J.
16. I agree.