COMMISSIONER OF WEALTH TAX vs. HALICON KAVITA TRUST

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WTR/280/1996HC GujaratGJHC24022210199629 January 1998Author: HONOURABLE MR. JUSTICE R.K.ABICHANDANI,HONOURABLE MR. JUSTICE ANIL R. DAVE2 pages
AI SummaryAllowed

What did the High Court hold?

The High Court answered the referred question in the affirmative, in favour of the assessee and against the Revenue. The reasoning is based on the judgment and order delivered in a similar case, Wealth Tax Reference No. 43/93, where the facts and the question involved were almost identical. The principle established in that case, which is applied here, is that the assessee trust, despite being a discretionary trust, is entitled to basic exemption. The operative direction is that the reference stands disposed of accordingly, with no order as to costs. No issue was expressly left undecided.

What were the facts?

This case involves a reference made by the Income Tax Appellate Tribunal (ITAT), Ahmedabad, to the High Court of Gujarat under Section 27(1) of the Wealth Tax Act, 1957. The reference concerns the assessment year(s) not explicitly stated but implied to be similar to Wealth Tax Reference No. 43/93. The Commissioner of Wealth Tax is the petitioner (Revenue), and Halicon Kavita Trust is the respondent (assessee). The dispute revolves around the assessee trust being a discretionary trust and whether it was entitled to basic exemption. The procedural history indicates the ITAT referred a question of law to the High Court for its opinion.

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 basic exemption for a discretionary trust under the Wealth Tax Act, 1957). Assessee's Contentions: The judgment does not record any specific contentions made by the assessee. The decision relies on the reasoning provided in a similar case, Wealth Tax Reference No. 43/93. Revenue's Contentions: The judgment does not record any specific contentions made by the Revenue. The decision is made in favour of the assessee and against the Revenue, implying the Revenue's position was not upheld.

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 280 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 HALICON KAVITA 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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