COMMISSIONER OF WEALTH TAX vs. SARUP SARAV TRUST

PDF · subscribers
WTR/274/1996HC GujaratGJHC24022204199629 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 delivered in a similar case, Wealth Tax Reference No. 43/93, decided on the same day. The principle established in that case, which is being applied here, is that 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 issues were expressly left undecided.

What were the facts?

The Commissioner of Wealth Tax referred a question of law to the High Court of Gujarat at Ahmedabad under Section 27(1) of the Wealth Tax Act, 1957. The Income Tax Appellate Tribunal, Ahmedabad, had directed the Assessing Officer to allow basic exemption to the assessee trust, which was a discretionary trust. The High Court noted that the facts and the question involved were similar to another case, Wealth Tax Reference No. 43/93, decided on the same day. The respondent, Sarup Sarav Trust, was served but did not appear.

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). The Revenue's contention, as implied by the reference, is that a discretionary trust should not be eligible for basic exemption. The assessee's contention, as implied by the Tribunal's order, is that the discretionary trust is indeed eligible for basic exemption. No specific authorities or precedents were mentioned in the judgment for either side.

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 274 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 SARUP SARAV 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.

----

*/Mohandas

More judgments on Section 27(1)

All 322 judgments and leading authorities on Section 27(1) →

Recent GST High Court judgments

Search GST case law →