COMMISSIONER OF WEALTH TAX vs. USHA KRUNAL TRUST

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WTR/291/1996HC GujaratGJHC24022221199629 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, in its decision dated 29/01/1998, answered the question referred by the ITAT in the affirmative, in favour of the assessee and against the Revenue. The Court stated that since the facts and the question involved were almost identical to those in Wealth Tax Reference No. 43/93, which was also decided on the same day, it was not necessary to reproduce the facts of this case. The reasoning from the judgment in Wealth Tax Reference No. 43/93 was applied. The principle derived is that a discretionary trust is eligible for basic exemption, as per the reasoning in the earlier case. The reference stands disposed of accordingly, with no order as to costs. No specific issue was 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 for its opinion under Section 27(1) of the Wealth Tax Act, 1957. The reference concerns the assessment year(s) not explicitly stated but implied to be related to the period covered by the ITAT's order. The order under challenge is that of the ITAT, which directed the Assessing Officer to allow basic exemption to the assessee, Usha Krunal Trust. The Revenue is the petitioner (Commissioner of Wealth Tax), and the assessee is the respondent (Usha Krunal Trust). The procedural history is that the ITAT referred a specific question of law to the High Court. The High Court notes that similar facts and questions were dealt with in another reference, Wealth Tax Reference No. 43/93, decided on the same day.

What were the issues?

1. Whether, as a matter of law and fact, the Appellate Tribunal is correct 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: The judgment does not record any specific contentions made by the assessee. The decision is based on the reasoning provided in a previous, similar case (Wealth Tax Reference No. 43/93). Revenue's Contention: The Revenue, as the petitioner, is challenging the ITAT's direction to allow basic exemption to a discretionary trust. The judgment does not detail the specific arguments presented by the Revenue, but it is implied that they are contesting the eligibility of a discretionary trust for basic exemption.

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 291 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 USHA KRUNAL 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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