Wealth-tax inclusion of trust assets upheld where shares were settled for a minor child's benefit and corpus could be applied.

Shares settled on trust without adequate consideration were held includible in the settlor's net wealth where the trust directed trustees to use both income and, if necessary, corpus for the maintenance, education, medical needs and marriage expenses of the settlor's minor son until age 21. The expression "for the benefit of" in section 4(1)(a)(iii) of the Wealth-tax Act was construed broadly, and the provision applied even where the beneficiary had only a life interest in income; here, the ability to apply corpus made the case stronger. The value of the 1,500 shares was therefore includible in the settlor's net wealth.

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Issues: Whether the value of 1,500 shares transferred under the trust deed was includible in the settlor's net wealth under section 4(1)(a)(iii) of the Wealth-tax Act, 1957.

Analysis: The trust deed required the trustees to apply not only the income but, if necessary, the corpus of the settled shares for the maintenance, education, medical needs and marriage expenses of the settlor's minor son until he attained the age of 21 years. The shares were transferred to trustees otherwise than for adequate consideration and were held on the valuation date for the benefit of the minor child. The expression "for the benefit of" was construed broadly, and the inclusion provision was held to apply even where the beneficiary had only a life interest in the income; the present case was stronger because the corpus could also be used for the minor's benefit.

Conclusion: The value of the shares was rightly includible in the settlor's net wealth and the answer was against the assessee and in favour of the Revenue.

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