Wealth tax---

---- Assessment---Assessee must be owner of asset---Amount not received by trust is not assessable in its hands---Indian Wealth tax Act, 1957.

It is only after the assessee becomes the owner of an asset in accordance with the provisions of the Wealth tax Act, 1957, that the said asset would be included in the wealth of the `assessee for the purposes of assessment.

Where the Tribunal had found that the executor had not paid the amount of Rs.3,50,000 to the assessee-trust:

Held, that the amount of Rs.3,50,000 was not includible in the total wealth of the assessee-trust in the assessment years 1975-76 to 1977-78.

G.S. Bapna for Commissioner.

T.C. Jain for Assessee.

JUDGMENT

The Income-tax Appellate Tribunal has referred the following question of law arising out of its order, dated April 14, 1981, in respect of the assessment years 1975-76 to 1977-78 under section 27(1) of the .Wealth tax Act, 1957:

"Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the amount of Rs.3,50,000 could not be included in the assessment of the trust for the year under consideration?"

On the last date of hearing on September 7, 1993, learned counsel for the Department wanted to verify as to whether the amount of Rs.3,50,000 which is now sought to be included in the wealth of the trust was also included in the wealth of the executor and tax paid accordingly. It has been stated that the said sum was included in the wealth of the executors and the tax has been realised thereon. Besides this fact, the Revenue Department failed to point out before the Income-tax Tribunal that the assessee-trust acquired the asset, namely, Rs.3,50,000, on or before the valuation date, viz., November 13, 1974. It is only after the assessee is the owner of an asset in accordance with the provisions of the Wealth tax Act, that the said wealth could be included in the wealth of the assessee for the purpose of assessment and a finding has been; recorded by the Tribunal that the executor has yet to pay the amount of Rs.3,50,000 to the assessee-trust and the said asset, namely, the sum of Rs.3,50,000, still continues with the executor and has not been parted with by' him to the assessee-trust. In these facts and circumstances, we are of the view that the Income-tax Appellate Tribunal was justified in holding that the amount of Rs.3,50,000 could not be included in the assessment of the trust for the years under consideration.

The reference is answered in favour of the assessee and against the Revenue/Department with no order as to costs.

M.B.A./968/T.F.????????????????????????????????????????????????????????????????????? Reference answered: