Charitable and religious trust property qualifies for wealth-tax exemption when the primary object is charitable.

Properties held under a trust for charitable and religious objects qualify for wealth-tax exemption where the trust's primary and predominant purpose is charitable, even if it also serves religious functions. The trust here was directed to running schools, managing a mosque and darga, and helping needy members of the community, and the assets were held for a public purpose in India. As no part of the assets was found to form part of a business or to be used outside India, the exemption under section 5(1)(i) of the Wealth-tax Act, 1957 applied and the assessee was entitled to relief.

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Issues: Whether the assessee's properties, held under trust for charitable and religious objects, were exempt from wealth-tax under section 5(1)(i) of the Wealth-tax Act, 1957.

Analysis: The objects of the trust were found to be mainly charitable, including running schools, managing the mosque and darga, and helping needy members of the community. The properties were held under trust for a public purpose of charitable or religious nature in India, and there was no finding that any part of the assets formed part of a business or were used outside India. The governing principle applied was that a trust need not be wholly and exclusively engaged in charitable activity if its primary and predominant object is charitable.

Conclusion: The assessee was entitled to exemption under section 5(1)(i) of the Wealth-tax Act, 1957, and the question was answered in favour of the assessee and against the Revenue.

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