COMMISSIONER OF WEALTH TAX vs. AMBALAL SARABHAI T NOS 3 TO 5

WTR/25/1987HC GujaratGJHC24012201198725 October 2001Author: HONOURABLE MR. JUSTICE MOHIT S. SHAH,HONOURABLE MR. JUSTICE D.A.MEHTA3 pages
AI SummaryAllowed

What did the High Court hold?

The High Court held that the Tribunal was correct in granting the exemption under Section 5(1)(i) of the Wealth-tax Act, 1957. The reasoning was based on the undisputed fact that the three respondent-assesses had already been held to be public charitable trusts under the Income-tax Act, 1961. Following its own prior decision in Wealth Tax Reference No. 26 of 1985, the Court affirmed that the statutory scheme of the Wealth-tax Act, when read in conjunction with the Income Tax Act, requires that a trust recognized as a public charitable trust under the Income Tax Act must be treated as such for the purposes of exemption under Section 5 of the Wealth-tax Act. The Court answered the common question in favour of the assessee and against the revenue. No issue was left undecided.

What were the facts?

The Gujarat High Court heard three Wealth Tax References (Nos. 25, 25A, and 25B of 1987) concerning assessment years 1974-75 and 1975-76. The references arose from a common order of the Income Tax Appellate Tribunal (ITAT), Ahmedabad, dated October 28, 1985, which dealt with Wealth Tax Appeal Nos. 952 to 957 of 1983. The core issue involved whether three trusts – Ambalal Sarabhai Trust No. 3, No. 4, and No. 5 – were entitled to exemption under Section 5(1)(i) of the Wealth-tax Act, 1957. The ITAT had granted this exemption, following its own prior decisions. The revenue challenged the ITAT's findings.

What were the issues?

1. Whether the Appellate Tribunal is right in law and on facts in holding that the assessee, being a public charitable trust, is entitled to exemption under section 5(1)(i) of the Wealth-tax Act, 1957? Assessee's contentions: The assessee argued that since they had been recognized as public charitable trusts under the Income-tax Act, 1961, they should also be treated as such under the Wealth-tax Act. The assessee relied on the High Court's decision in Wealth Tax Reference No. 26 of 1985, which held that the statutory scheme of the Wealth-tax Act read with the Income Tax Act mandates that a trust recognized as public charitable under the Income Tax Act must be treated as such under Section 5 of the Wealth-tax Act. Revenue's contentions: The revenue contended that the Appellate Tribunal was not right in law and on facts in granting the exemption under Section 5(1)(i) of the Wealth-tax Act, 1957.

Which sections of the Income-tax Act were involved?

Section 5(1)(i),Section 5

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

WEALTH TAX REFERENCE No 25 of 1987

with WEALTH TAX REFERENCE No 25-A and 25-B of 1987

For Approval and Signature:

Hon'ble MR.JUSTICE M.S.SHAH and Hon'ble MR.JUSTICE D.A.MEHTA

============================================================ 1. Whether Reporters of Local Papers may be allowed : NO to see the judgements?

2.

To be referred to the Reporter or not? : NO 3. Whether Their Lordships wish to see the fair copy : NO of the judgement?

4.

Whether this case involves a substantial question : NO of law as to the interpretation of the Constitution of India, 1950 of any Order made thereunder?

5.

Wheth

The order continues below.

Read the full judgment

A free account opens 10 full judgments a month. Re-reading one you have already opened does not count again.

Create a free accountSign in

See plans and prices

The summary, the parties, the sections and the citations above are open to everyone and always will be. Only the text of the order and the PDF are metered.

More judgments on Section 5

All 847 judgments and leading authorities on Section 5 →

Recent GST High Court judgments

Search GST case law →