Direct assessment of beneficiaries under wealth-tax law is permitted, while the valuation dispute was left for further reference.

Section 21(2) of the Wealth-tax Act, 1957 authorises direct assessment of beneficiaries notwithstanding assessment of the trustees, so the Wealth-tax Officer may assess beneficiaries directly. The valuation dispute concerning the assessee's interest in immovable property required closer examination of the facts relating to compensation, apportionment, co-ownership and the extent of the interest involved, and was not finally answered on the existing material. A reframed question of law was directed to be referred for further consideration.

---

---

Issues: (i) Whether beneficiaries could be directly assessed under section 21(2) of the Wealth-tax Act, 1957 notwithstanding assessment of the trustees; (ii) whether the valuation question concerning the assessee's interest in the immovable property required further examination and reference.

Issue (i): Whether beneficiaries could be directly assessed under section 21(2) of the Wealth-tax Act, 1957 notwithstanding assessment of the trustees.

Analysis: Section 21(2) expressly permits direct assessment of beneficiaries and is not excluded by the general scheme of section 21(1). The provision leaves no room for doubt that the Wealth-tax Officer may assess the beneficiaries directly.

Conclusion: The question was answered against the assessee and in favour of the Revenue.

Issue (ii): Whether the valuation question concerning the assessee's interest in the immovable property required further examination and reference.

Analysis: The valuation controversy depended on a closer examination of the facts relating to acquisition compensation, apportionment, co-ownership, and the assessee's interest in the property. The matter was not treated as fit for a conclusive answer on the existing material and a reframed question of law was directed to be referred.

Conclusion: The matter was directed to be sent back for reference on the reframed valuation question.

Final Conclusion: The decision finally settled the direct-assessment issue under section 21(2) against the assessee, while leaving the valuation dispute to be referred in a reframed form for further consideration.

Ratio Decidendi: Section 21(2) of the Wealth-tax Act, 1957 authorises direct assessment of beneficiaries notwithstanding the general scheme of assessment of trustees.

---