COMMISSIONER OF WEALTH TAX vs. TARUN KALINDI TRUST

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WTR/292/1996HC GujaratGJHC24022222199629 January 1998Author: HONOURABLE MR. JUSTICE R.K.ABICHANDANI,HONOURABLE MR. JUSTICE ANIL R. DAVE2 pages
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What did the High Court hold?

The High Court of Gujarat, per R.K. Abichandani, J., answered the referred question in the affirmative, in favour of the assessee and against the Revenue. The Court stated that the facts and the question involved were similar to Wealth Tax Reference No. 43/93, which was decided on the same day. For the reasons provided in that earlier judgment, the High Court found the Tribunal's direction to allow basic exemption to the discretionary trust to be correct. The reference was disposed of accordingly. The specific reasoning from the referenced case is not detailed here, but the ratio would be that discretionary trusts are entitled to basic exemption under the Wealth Tax Act, 1957, despite their discretionary nature. The operative direction was to uphold the Tribunal's order.

What were the facts?

The Commissioner of Wealth Tax has referred a question of law to the High Court of Gujarat at Ahmedabad concerning the assessment of Tarun Kalindi Trust. The Income Tax Appellate Tribunal, Ahmedabad, had directed the Assessing Officer to allow basic exemption to the assessee trust, despite it being a discretionary trust. The High Court notes that the facts and the question involved are similar to another case, Wealth Tax Reference No. 43/93, decided on the same day. The specific assessment year(s) and the amount in dispute are not recorded in the provided judgment.

What were the issues?

1. Whether, the Appellate Tribunal is right in law and on facts in directing the Assessing Officer to allow basic exemption when the assessee trust was a discretionary trust? (Question of law and fact, concerning the Wealth Tax Act, 1957). Assessee's Contention: Not recorded in the judgment. Revenue's Contention: The Revenue, through the Commissioner of Wealth Tax, has sought the opinion of the High Court on whether the Tribunal erred in allowing basic exemption to a discretionary trust. The judgment does not explicitly state the Revenue's arguments before the High Court, but the reference itself implies disagreement with the Tribunal's order.

Which sections of the Income-tax Act were involved?

Section 27(1)

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

WEALTH TAX REFERENCE No 292 of 1996

For Approval and Signature:

Hon'ble MR.JUSTICE R.K.ABICHANDANI and MR.JUSTICE A.R.DAVE ============================================================ 1. Whether Reporters of Local Papers may be allowed to see the judgements?

2.

To be referred to the Reporter or not?

3.

Whether Their Lordships wish to see the fair copy of the judgement?

4.

Whether this case involves a substantial question of law as to the interpretation of the Constitution of India, 1950 of any Order made thereunder?

5.

Whether it is to be circulated to the Civil Judge?

-------------------------------------------------------------- COMMISSIONER OF WEALTH TAX Versus TARUN KALINDI TRUST --------------------------------------------------------------

Appearance: B.B.NAYAK with MR MANISH R BHATT for Petitioner Respondent served

--------------------------------------------------------------

CORAM : MR.JUSTICE R.K.ABICHANDANI and MR.JUSTICE A.R.DAVE Date of decision: 29/01/98

ORAL JUDGEMENT (Per R.K.Abichandani,J.)

The Income Tax Appellate Tribunal, Ahmedabad has referred for the opinion of this Court the following

question under Section 27(1) of the Wealth Tax Act, 1957. "Whether, the Appellate Tribunal is right in law and on facts in directing the Assessing Officer to allow basic exemption when the assessee trust was a discretionary trust?"

A similar question has been answered by us today in Wealth Tax Reference No. 43/93. Since the facts are similar and the question involved almost identical, we do not find it necessary to reproduce the facts of this case. For the reasons given by us in our judgement and order delivered in Wealth Tax Reference No. 43/93 today, we answer the question referred to us in the affirmative in favour of the assessee and against the Revenue. The reference stands disposed of accordingly with no order as to costs.

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*/Mohandas

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