ORDER
P. Venkatarama Reddi, J.
1. This Wealth-tax Reference case has been placed before the Full Bench on an order of reference made by the Division Bench consisting of Syed Shah Mohammed Quadri. J and Parvatha Rao, J. The Division Bench found an apparent conflict between the two decisions of this Court – RC No.67 of 1969 (unreported) and Commissioner of Wealth-Tax v. H.E.H. Nizam’s Sahebzadi Anwar Begum Trust, 129 ITR796. Both these cases arose between the same parties.
2. The assessment years involved in this reference case are 1970-71 to 1975-76. The following questions of law were referred by the Income-tax Appellate Tribunal, Hyderabad, on a direction given by the High Court, at the instance of Revenue:
“(1) Whether on the facts and in the circumstances of the case, the Appellate Tribunal was correct in law in holding that the assessee had not beneficial interest in the entire corpus regarding the shares fund liable to be assessed to Wealth-tax under Section 21(1)?
(2) Whether on the facts and in the circumstances of the case, the Appellate Tribunal was correct in law in holding that the jewellery fund was not liable to be assessed to Wealth-tax under Section 21(1)?
(3) Whether on the facts and in the circumstances of the case, the Appellate Tribunal is correct in law in holding that it was not open to Wealth-tax Officer to make an assessment under Section 21(1) subsequent to the direct assessment on the beneficiary?
(4) Whether on the facts and in the circumstances of the case, the Appellate Tribunal was correct in law in holding that the assessments under Section 21(1) were not justified being in the nature of double assessments?”
3. We may indicate here that the conflict of views noticed by the Division Bench is with regard to the second question. In regard to the other questions, there was practically no debate before us. Before, we take up for consideration the main and perhaps the only contentious issue which is question No.2, we shall advert to the facts giving rise to this reference case. A trust called “Sahebzadi Anwar Begum Trust” was created by the Nizam of Hyderabad, H.E.M. Mir Osman All Khan Bahadur by an indenture dated 21-3-1953. The sole beneficiary of the Trust is Mrs. Sahebzadi Anwar Begum (hereinafter referred to as “Anwar Begum ) who was daughter-in-law of the Settlor. The assessees in the instant case are the Trustees of the said Trust “representing Sahebzadi Anwar Begum” The Tribunal clarified that Anwar Begum is represented by the Trustees, who filed the returns of wealth on her behalf. The Wealth-Tax Officer made assessment under Section 16(3) of the Wealth Tax Act on the value of life interest of Anwar Begum in the shares fund held by the Trustees and her beneficial interest in the jewellery fund mentioned in Part I First Schedule of the Trust deed estimated at Rs.25,000/-. To the above two sums, he added the personal wealth already assessed in her individual capacity for the purpose of applying the rate. However, for the year 1975-76, the Wealth-Tax Officer estimated her beneficial interest in the jewellery in Part I by determining the income which the jewellery could have fetched if invested in gilt-edged securities and applying the multiplier based on Rule 1-B, he quantified the wealth attributable to Part I jewellery at Rs.5,08,638/-. No assessment was made in respect of Part II jewellery as it was probably sold out, as seen from the assessment order for 1975-76. On appeal, the Appellate Commissioner upheld the
assessments for each of the assessment years. As regards jewellery, the Appellate Commissioner purported to follow the decision in Commissioner of Wealth Tax v. H.E.H. Nizam’s Sahebzadi Anwar Begwn Trust (supra) in preference to the earlier decision in R.C. No.67 of 1969 and held that Anwar Begum had not merely a right to wear but also beneficial interest in the entire jewellery fund, which, according to the Appellate authority, ought to be valued on the basis of actuarial valuation. The appellate Commissioner therefore directed the reference to a recognised actuary to fix the value thereof. In that sense, he enhanced the assessment and directed recomputation of the wealth, while rejecting the plea of the appellant-assessee. The appellate Commissioner also held that the assessment of the beneficial interest of Anwar Begum could be made in the hands of the Trustees under Section 21(1) although there was a direct assessment on Anwar Begum earlier. On appeal to the Tribunal, the decision of the appellate Commissioner was reversed and the appeals were allowed. The Tribunal followed the decision of this Court in RC No.67 of 1969 dated 5-11-1970 which relates to wealth-tax assessments of the same assessee for the earlier years. The Tribunal held that there is no beneficial interest which can be treated as an asset within the meaning of Section 2(e) of the Wealth-tax Act The Tribunal expressed the view that the decision in Commissioner of Wealth-Tax v. H.E.H. Nizam’s Sahebzadi Anwar Begum Trust (supra) on which the Appellate Commissioner placed reliance, has no direct application as the issue involved therein was quite different. The Tribunal further held that Wealth-tax Officer having opted direct assessment on the beneficiary and having made a reference to the returns filed by the Trustees, it was not open to him to resile from the option and choose to make an assessment again on the Trustees. On this view also, the Tribunal felt that the impugned assessments were liable to be set aside.
4. Before we proceed further, it is necessary to refer to the relevant clauses in
the Trust-deed in so far as jewellery is concerned. The relevant clause is clause 4 and the same is extracted hereunder to the extent necessary:
“4. The Trustees shall hold and stand possessed of the said ornaments and articles of Jewellery specified in the first Schedule hereunder written hereinafter for brevity’s sake called “the Jewellery Fund” (which expression shall include all other properties or investments of any kind whatsoever into which the same or any part thereof may be converted or varied from time to time and such as may be acquired by the Trustees or come to their hands by virtue of these presents or by operation of law or otherwise howsoever in relation to these presents) Upon the Trusts following, namely:
(a) As soon as conveniently possible after the execution hereof to deposit and keep deposited in their joint names all the articles specified in Part I of the First Schedule hereunder written for safe custody with some safe deposit company or bank of good repute approved of by the Trustees preferably in Bombay.
(b) Until the death of the Settlor’s daughter-in-law Sahebzadi Anwar Begum the wife of the Settlor’s Second son Prince Muazzam Jah Bahadur or until she shall have been divorced from the said Prince Muazzam Jah Bahadur or until she shall remarry some other person, whichever of the three events shall take place first, to hold the Jewellery Fund upon Trust:
(i) To allow the said Sahebzadi Anwar Begum to wear and use the articles specified in Part 1 of the First Schedule hereunder written or such of them as may be required on and for the purpose of any special ceremonial or festive occasion and after any such ceremonial or festive occasion shall be over, to take charge of such articles from the said Sahebzadi Anwar Begum and to redeposit the same for safe custody in the joint names of the
Trustees with some safe custody in the joint names of the Trustees with some safe deposit company or bank of good repute approved of by the Trustees preferably in Bombay provided that the Trustees shall not liable or held responsible in any manner whatsoever by any person whomsoever for any loss or damage that may be caused to or in respect of any of the said articles specified in Part 1 of the First Schedule hereunder written in the course of the removal or transit of any of the said articles for the purpose aforesaid or for any other consequences resulting from the action of the Trustees in allowing the said articles or any of them to be worn or used as aforesaid.
(ii) To allow the said Sahebzadi Anwar Begum to wear and use the articles specified in Part II of the First Schedule hereunder written for her ordinary and every day use without the Trustees being in any way liable or held responsible in any manner whatsoever by any person whomsoever for any loss or damage that may be caused to or in respect of any of the said articles specified in Part II of the First Schedule hereunder written on account or in the course of the same being kept with or worn or used by her as aforesaid or for any other consequences resulting from the action of the Trustees in allowing the said articles or any of them to be kept with or worn or used by her as aforesaid; Provided, however, that if at any time before her death or divorce or remarriage as aforesaid, whichever of the three events shall take place first, any part of the Jewellery Fund be converted into any income yielding investment, then the Trustees shall pay the net income of such investment comprised in the Jewellery Fund to her until her death or divorce or remarriage as aforesaid, whichever of the three events shall take place first.”
5. As to the disposal and devolution if the jewellery after the death of Anwar
Begum or in the event of her divorce from the Prince or her remarriage, sub-clause (c) of Clause 4 provides for the same and it is not relevant for our purpose.
6. Now a quick look at the relevant provisions. Section 3 of the Wealth-tax Act is the charging Section, according to which the wealth-tax is chargeable on the net wealth on the corresponding valuation date. Section 4 specifies the assets which ought to be included in the net wealth and which in the normal course may not be capable of being brought within the charging Section. Then comes Section 5 which bears the caption “Exemptions in respect of certain assets”. The assets specified in various clauses of Section 5 will not fall under the net wealth of the assessee. Jewellery meant for personal use of the assessee was one of the items specified in Section 5 till 1972, However, with effect from 1-4-1972, exemption on jewellery was retrospectively withdrawn. Section 7 provides for valuation of assets as it stood at the relevant point of time. Subsection (1) of Section 7 enjoins that the value of any asset other than cash shall be estimated to be the price which in the opinion of the Assessing Officer, it would fetch if sold in the open market on the valuation date. This is subject to the rules, if any, made in this behalf. Section 14 obliges a person to furnish returns of his net wealth or the net wealth of any other person in respect of whom he is assessable if on the valuation date, his net wealth or the net wealth of such person exceeds the maximum amount which is not chargeable to wealth-tax. Section 21 provides for assessment on the Court of Wards, Administrator-General, Official Trustee, Receiver, Manager of Trustee in case the assets are held by them and the assessment is liable to be made in the like manner and to the same extent as the wealth-tax is liable to be levied on the persons on whose behalf or for whose benefit the assets are held. Section 21(4) provides for levy and recovery of wealth-tax from the trustee etc., in case the shares of persons on whose behalf or for whose benefit any such assets are held are indeterminate or unknown. It may be noted
at this juncture that the assessments were made in the instant case on the Trustees under Section 21(1).
7. The term “assets” is defined in Section 2(e) as including “property of every description, movable or immovable”; it does not however included the items of property specifically mentioned therein. The term “net wealth” is defined in Section 2(m). The aggregate value of all the assets belonging to the assessee on the valuation date minus the aggregate value of all the debts owed by the assessee constitutes his net wealth.
8. Coming to the core question, it is seen from the terms of Trust-deed that the Trustees are required to allow Anwar Begum to wear and use the jewels specified in Part I of the First Schedule on ceremonial or festive occasions and to allow her to retain the jewels specified in Part II for her, “Ordinary and every day use”. Anwar Begum is allowed to wear and use the jewels in the manner aforesaid until her death, divorce or remarriage. In ‘the event of death, divorce or remarriage, the Trustees are enjoined to sell the jewels and invest the sale proceeds and pay the income to the children and other remote issues of Anwar Begum and Prince Muazzam Jah. Provision for devolution in the event of failure of issues is also made. The Trustees are empowered to convert the jewellery into income-yielding investment subject to the condition that the net income from the investment has to be paid over to Anwar Begum.
9. Having noticed these salient features of the Trust-deed, Chinnappa Ready, J., speaking for the Division Bench observed in RCNo.67 of l969:
“Even so, we are not satisfied that the interest of the Sahebzadi in the Jewellery Fund is an asset within the meaning of Section 2(e) of the Wealth-tax Act under the terms of the Trust the Sahebzadi is merely allowed to wear the jewels. She has not proprietary interest of any sort in the jewels. For instance, she cannot pledge the jewels, she cannot lend the
jewels to a friend or relative to be worn on occasions. The Trustees are further given the right to withdraw the jewels from her any time they like and sell them. No doubt, the income from the sale-proceeds will have to be paid to the Sahebzadi but Sahebzadi herself has no voice on the question whether the jewels may or may not be sold. Her interest in jewels is limited to being allowed to wear them if the trustees do not withdraw them from her. To our minds, the interest appears to be of the permissive nature and cannot be called ‘property’ however widely the expression may be interpreted. We therefore agree with the Tribunal that neither the interest of the Sahebzadi in the Jewellery Fund nor her interest in the Shares Fund is an asset within the meaning of Wealth-tax Act.”
Their Lordships expressed the view that the phrase “property of every description” is an expression of wide import. The learned Judges observed that the words “movable or immovable” following the expression “property of every description” are meant to enlarge rather than restrict the scope of the definition. The learned Judges also recorded their dissent with the view expressed by P.B. Mukherji, C.J., of Calcutta High Court, in Commissioner of Wealth-Tax v, U.C. Mehta, 78 1TR 214, to the effect that the properties which do not answer the test of movability or immovability such as an intangible right do not come under the definition of “assets” and the words “movable or immovable” restrict the plenitude of the meaning of “property of every description”. The Division Bench relied on the following observations of the Supreme Court in Ahmed GH. Ariff v. Commissioner of Wealth Tax, 16 1TR471:
“Now ‘property’ is a term of the widest import and, subject to any limitation which the context may require, it signifies every possible interest which a person can clearly hold or enjoy………. There is no
reason or justification to give any restricted meaning to the word ‘asset’ as defined by Section 2(e) of the Act when
the language employed shows that it was intended to include property of every description.”
10. The learned Judges who decided RC No.67 of 1969 also rejected the contention advanced by the Counsel for the assessee that the test of transferability or marketability should be satisfied. The proposition enunciated by the Division Bench of Bombay High Court in Commissioner of Wealth Tax v. Purushottam N. Amersey, 71 ITR 180, was referred to with approval. In that decision, the learned Judges of the Bombay High Court observed that the use of words ‘if sold’ creates a fictional position which the Tax Officer has to assume and “Tax Officer must assume that there is an open market in which the asset can be sold and proceed to value it on that basis.” Having thus far expressed a view against the assessee, the learned judges came to the conclusion that the interest of Anwar Begum in the Jewellery Fund is not an ‘asset’ within the meaning of Section 2(e). The legal position was clarified by Chinnappa Reddy, J., in the passage quoted supra. The reference was accordingly answered in favour of the assessee.
11. The above decision in RC No.67 of 1969 was followed and applied to a case in which a right to live in the house during the life time of the assessee was conferred by the terms of the Trust-deed. Pursuant to the directions in the Trust-deed, the Trustees constructed a house for the purpose of residence of the assessee during his life time free of rent. It was held by the Division Bench consisting of Jeevan Reddy, J., and Neeladri Rao, J., that the right to live in the house without anything more cannot be called an ‘asset’ within the meaning of Sections 2(e) and 7(1) of the Wealth-tax Act. After referring to the decision in RC No.67 of 1969 (mentioned by mistake as RC No.69 of 1969), the learned Judges observed:
“We are of the opinion that the said reasoning applies equally to the interest of the assessee concerned herein. Here too the interest of the assessee is in the
nature of a license. He can only live there. He cannot dispose of the said interest nor can he deal with it in any manner to his benefit. It cannot also be said that he has a proprietary interest therein.”
Whether or not the reasoning in RC No.67 of 1969 in relation to right to wear jewellery applies with equal force to the right of the beneficiary to live in the house throughout his life without payment of any rent, we do not want to express any opinion. Suffice it to note that the reasoning and dicta in RC No.67 of 1969 was extended even to a case where the content of the right given to the beneficiary over the trust property was of much greater magnitude.
12. We shall now examine the decision in Commissioner of Wealth Tax v. H.E.H. Nizam’s Sahebzadi Anwar Begum Trust (supra) which has inspired the Income-tax authorities to take the view against the assessee notwithstanding the earlier decision of this Court in RC No.67 of 1969. As rightly pointed out by the Tribunal, the question whether the right or privilege of wearing the jewellery was an ‘asset’ ‘belonging’ to the assessee did not directly arise for consideration therein. The material questions considered by their Lordships in Commissioner of Wealth-Tax v. H.E.G. Nizam’s Sahebzadi Anwar Begum Trust (supra) are;
“1. …..
2. Whether, on the facts and in the circumstances of the case, the jewellery mentioned in Part II of the First Schedule could be excluded in determining the net wealth assessable in the assessee’s hands for each of the valuation dates?
3. Whether, on the facts and in the circumstances of the case, jewelleries mentioned in Part-I of the First Schedule and shares to the extent of Rs.3,60,000/-out of the share fund be assessed in terms of Section 21(1) of the Wealth-tax Act in the assessee’s hands in respect of each of the valuation dates?
4. Whether, on the facts and in the circumstances of the case and on a true reading of Section 21 of the Wealth-tax Act insofar as it applies to the trustees, the material persons to be held as beneficiaries under the trust on the valuation dates for the assessment years in question are:
(i) Smt. Sahebzadi Anwar Begum with a determinate share, as well as……….”
13. As far as question No.2 is concerned, the teamed Judges were not really concerned with the point whether the right conferred on the beneficiary to make use of Part II jewellery is in the nature of an asset chargeable to Wealth-tax. The point considered was whether it was exempt from being charged to Wealth-tax under Section 5(1) (viii) as it stood before the amendment effected in 1971 by Finance Act No.2 of 1971. That question was answered in favour of the assessee on the following reasoning:
“………………. The jewellery in Part II of
the First Schedule was exclusively kept for the ordinary and every day use of Sahebzadi Anwar Begum. It is not in dispute that the jewellery meant for the ordinary and every day use, if an asset is exempt from being charged to wealth-tax under Section 5(1)(viii) of the W.T. Act (vide Nizam’s Supplemental Jewellery Trust v. CWT, (1975) TI.R 1985 (AP)”.
It is seen from the above passage that the question answered was not whether the personal right of user of jewellery is an asset, but the question decided was whether even assuming it to be an asset, it is exempt from Wealth-tax under Section 5(1)(viii). The same idea was conveyed by the learned Judges while referring to the decision in RC No.67 of 1969. The crux of the controversy that they were dealing with was expressed by their Lordships in the following terms:
“In the present case, the point that arose for consideration was whether the
jewellery fund is liable to be assessed under Section 21(1) of W.T. Act.”
The earlier Bench decision was distinguished on the ground that in RC No.67 of 1969, “this aspect was not under consideration but was confined to the point whether the mere wearing of jewellery constitutes an asset.” It was observed:
“…….taking into consideration the terms
of the -trust-deed in the instant case, we are of the view that the jewellery fund is liable to be taxed under Section 21(1) of the W.T. Act.”
The real ratio of the decision is that the jewellery meant for every day use (Part II jewellery) even if it be an asset, is exempt from tax under Section 5(1)(viii) in the hands of the beneficiary and therefore no tax could be levied on trustees whose liability is coextensive with that of beneficiary, as ordained by Section 21(1). However, the underlined expression in the following sentence is sought to be pressed into service by the Revenue to make out a case of conflict with the decision in RC No.67 of 1969 which the learned Judges themselves distinguished. The said sentence is as follows:
“In this view of the matter, the jewellery in Part II of the First Schedule, though it constitutes an asset, is exempt from being charged to wealth-tax”.
If we may say so with respect, the phrase “though it constitutes an asset” is not an accurate expression and it is used more or less an equivalent to the expression – “even if it constitutes an asset”. Except the analysis of the provisions of the Trust-deed and the arguments of the Revenue, no conscious finding was reached that the right of personal use of jewellery is an asset. We are therefore of the view that nothing laid down in Commissioner of Wealth-Tax v. H.E.H. Nizam’s Sahebzadi Anwar Begum Trust (supra) conflicts with the view taken in RC No.67 of 1969. As regards Part I jewellery, the learned Judges took the view that the beneficial interest therein is liable to be assessed in terms of Section 21(1) because
Section 5(1)(viii) has no application as the jeweller)’ was not meant for every day personal use, but it was meant for use only on ceremonial or festive occasions. Thus, both with regard to Part I and Part II jewellery, the learned Judges held that Section 21(1) was applicable, but Part II jewellery was not liable for Wealth-tax as the said jewellery was exempt from tax as per Clause viii of Section 5(1) as it then stood. The question whether the use of Part I jewellery on certain occasions is an asset chargeable to Wealth-tax did not fall for consideration at all. It is to be noted that following the decision in RC No.67 of 1969, this Court rejected the Reference application of the Department in WTC No.4 of 1991. The Special Leave Petition filed by the Department against the said order was dismissed on . We are only referring to this fact to complete the narrative though we are conscious that in the absence of a reasoned order, the dismissal of Special Leave Petition cannot by itself be construed as a binding precedent.
14. Notwithstanding the fact that there is no real conflict between the decisions in RC No.67 of 1969 and 129 ITR 796, learned Standing Counsel for the Revenue has endeavoured to canvass the correctness of the decision in RC No.67 of 1969, undaunted by the fact that the decision held the field for nearly three decades and the logic of the principle laid down therein was extended to certain other analogous situations as well. As the matter has come up on reference to the Full Bench, we have given a fresh thought to the entire problem so as to see whether the established view of this Court needs to be upset even at this distance of time.
15. On the question of chargeability to Wealth-tax of Part I jewellery, we are inclined to reiterate the view taken in RC No.67 of 1969 and hold that the right-if all it is a right, conferred on Anwar Begum to wear the jewellery on ceremonial or festive occasions, cannot be regarded an ‘asset’ within the meaning of Section 2(e) of the Wealth-Tax Act.
16. Let us now analyse the terms of the Trust-deed as embodied in Clause 4 (extracted supra). Clause 4 opens up with the prefactory words “the Trustees shall hold and stand possessed of the said ornaments and articles of jewellery specified in the First Schedule”. The bracketed words (vide page 7) recognise the power of the Trustees to convert them into “other properties or investments of any kind”. The opening words namely – “the Trustees shall hold and stand possessed of the said ornaments………” make it clear that
the legal title as well as possession in the jewellery remains with the Trustees. The jewellery items specified in Part I are to be deposited in the joint names of the Trustees with a Company or Bank of good repute preferably in Bombay for safe custody thereof. Clause (b) re-emphasises that until the death, divorce or remarriage the Trustees will “hold the jewellery fund upon Trust”. Sub-clause (i) of clause 4(b) empowers the Trustees “to allow Sahebzadi Anwar Begum to wear and use the articles specified in Part I or such of them as may be required on and for the purpose of any special ceremonial or festive occasion” and after such ceremonial or festive occasion is over, the Trustees are to take charge of such articles from Anwar Begum and redeposit the same for safe custody in a Company or Bank as aforementioned. Sub-clause (i) further provides that Trustees shall not be liable or held responsible for any loss or damage that may be caused to the articles specified in Part I in the course of removal or transit of the said articles or for any other consequence resulting from the action of the Trustee in allowing the said articles to be worn and used by Anwar Begum. Thus, what is contemplated by the Trust-Deed is nothing more than the occasional entrustment of the jewellery to Anwar Begum to enable her to wear the same on festive and ceremonial occasions. Excepting during these limited days and for a limited time, for all legal and practical purposes, the jewellery is in the possession and control of the Trustees only. On those special occasions, Anwar Begum will just have temporary custody of jewellery
for the purpose of wearing them. The Trustees will hand them over to Anwar Begum, and take them back immediately after the occasion is over. As the Instrument itself says, the Trustees ‘allow’ her to wear the jewellery on those special occasions. The idea of limited and permissive user so clearly reflected in the terms of the Trust-deed that makes it difficult to recognise any right of ownership or to possession, it would be difficult to recognise an iota of proprietary interest in Anwar Begum. It cannot be said that the privilege conferred on Anwar Begum to wear the jewellery for a limited time on special occasions bears the imprint of a proprietary right or interest. Both de jure and de facto possession rests with the Trustees, apart from the legal title in relation thereto. The discretion of the Trustees to convert jewellery into income-yielding investment as provided for, by the proviso occurring after sub-clause (ii) of clause 4, is yet another feature which militates against the conclusion that it constitutes the net wealth of Anwar Begum. It indicates that the Trustees need not necessarily make the jewellery available for her limited use till her death, divorce or remarriage. At any time, for good reason, the jewellery can be disposed of without regard to the Will of the beneficiary. True, she will then get a right to receive the income. But, that is not a right in praesenti or a proprietary interest crystallised on the valuation date. It is wrong to think that an asset is created in her favour by the Trust-deed merely because she has a limited privilege to use the Part I jewellery or that she can draw income after their conversion into income-yielding assets. No money value can possibly be attributed to the limited privilege which Anwar Begum had under the terms of Trust deed in regard to Part I jewellery, on the relevant valuation date.
17. The learned standing Counsel for Income Tax Department relying on the decision of the Supreme Court in Nawab Sir Mir Osman Ali Khan v. W.T. Commr. Hyderabad, submits that a husk or semblance of title is sufficient to attract the charge under the Wealth Tax Act. In that case, the Supreme
Court was dealing with the question whether the property in respect of which registered sale-deeds had not been executed, but consideration for sale was received and possession was delivered, could be included in the net wealth of the vendor. The contention that such assets cannot be said to ‘belong’ to the assessee was negatived and the question was answered in favour of the Revenue. The connotation of expression ‘belonging to’ occurring in Section 2(m) was discussed. The ultimate conclusion was that the legal title continued to remain with the vendor as the Conveyance Deed had not been executed and registered, as required by law. It was observed: “The assessee had not the totality of the rights that constitute title but a mere husk of it and very important element of the husk of it.” We do not think that the ratio of that decision which construed the expression “belonging to”, applies to the instant case as the vendor was not technically divested of his title to the lands sold out and the title in rem still vested in him. He continued to be the real and legal owner, as pointed out by the Supreme Court. That conclusion reached by Supreme Court, though reluctantly, has no relevance here. It is true that in ordinary and normal signification, a Trust gives rise to dual ownership. But, in the instant case, it is difficult to say that the beneficiary owns or holds the Trust property in any sense. The various incidents and features discussed above do not go to suggest any element of ownership inhering in the beneficiary in regard to the Trust property nor even a right to be in possession thereof. As pointed out by the Supreme Court in the same case, “it is the property of a person, or that which is in his possession as of right, which is liable to Wealth-tax” (vide para 13). It is difficult to say that the right to wear the trust jewellery on specified occasions, that too, so long as jewellery is not disposed of by Trustees, does qualify to be regarded as an asset and property belonging to Anwar Begum, even if it bears some traces of beneficial interest.
18. The learned senior Standing
Counsel also referred to the recent decision
of the Supreme Court in CIT v. H.H. Maharani Usha Devi, 231 ITR 793. In that case, the Supreme Court held that heirloom jewellery owned by the assessee was not liable to Wealth-tax for the reason that it constitutes the personal effects of the assessee held for personal use and therefore, stand excluded from the ambit of Section 2(xiv) of the Act. Thus, the question answered therein is vastly different and has no bearing on the issue involved in the present case.
19. We therefore, affirm the finding of the Tribunal on this aspect and answer the question against the Revenue.
20. Then remains the question whether Part II jewellery should be treated on the same footing as Part I jewellery. We consider it unnecessary to deal with this question. In fact, question No.2 could have been confined to only Part I jewellery inasmuch as Part II jewellery was not subjected to tax for any of the years. It is noted in the assessment order for 1975-76 that during assessment year ending on 31-3-1972, Part II jewellery was sold out and Part II jewellery is shown as ‘nil’. Even for the assessment years 1970-71 and 1971-72 the value of Part II jewellery has not been included in assessable wealth, probably because the jewellery was not in existence. We, therefore, consider it unnecessary to answer the second question vis-a-vis Part II jewellery.
21. Coming to the first question, the point is squarely covered by the decision of this Court in RC No.67 of 1969. It was held that the interest of Anwar Begum in the ‘Shares Fund’ is not an asset within the meaning of Section 2(e) of the Act because it is in the nature of a right to receive annuity which cannot, under the terms of Trust Deed, be commuted into a lumpsum grant and therefore falls under exclusionary clause. Correctness of this decision has not been questioned nor is there any decision which runs contrary to the view expressed by their Lordships in RC No.67 of 1969. We see no reason to take a fresh look into the matter.
The question No.1 is, therefore, answered in favour of the assessee and against the Revenue.
22. As regards the other two questions i.e., 3 and 4, there is no need to answer them when once it is held that the shares fund and the jewellery fund are not liable to be assessed to Wealth-tax at all in the hands of Anwar Begum, as they do not constitute her assets. We, therefore, decline to answer these questions.
23. The RC is, accordingly, disposed of. We make no order as to costs.