COMMISSIONER OF WEALTH TAX vs. HELD KAVITA TRUST

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WTR/279/1996HC GujaratGJHC24022209199629 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 of Gujarat, following its decision in a similar case (Wealth Tax Reference No. 43/93) decided on the same day, answered the referred question in the affirmative. This means the Tribunal was correct in directing the Assessing Officer to allow basic exemption to the assessee trust, even though it was a discretionary trust. The reasoning is based on the identical facts and identical questions involved in the earlier reference. The High Court's decision in the earlier case, which is being applied here, would have elaborated on the legal principles justifying the grant of basic exemption to discretionary trusts. The reference stands disposed of accordingly, with no order as to costs.

What were the facts?

The Commissioner of Wealth Tax has referred a question of law to the High Court of Gujarat at Ahmedabad concerning a decision of the Income Tax Appellate Tribunal (ITAT), Ahmedabad. The reference pertains to Wealth Tax Reference No. 279 of 1996. The ITAT had directed the Assessing Officer to allow basic exemption to the assessee, Kavita Trust, despite it being 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 (assessee) was served, and the petitioner (Commissioner) was represented by counsel.

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, is challenging the ITAT's decision to grant basic exemption to a discretionary trust, implying that such exemption should not be allowed in such cases. The specific arguments or legal provisions relied upon by the revenue are not detailed in the provided text.

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 279 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 HELD 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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