Predominantly charitable trust qualifies for wealth-tax exemption even without exclusive charitable objects.

For exemption under section 5(1)(i) of the Wealth-tax Act, 1957, a trust need not be wholly devoted to a public charitable or religious purpose; it is sufficient if the trust, viewed as a whole, is primarily or predominantly so devoted. The omission of the word "wholly" was treated as deliberate, and the exemption was read as applying to the corpus of trust property where the dominant character of the trust is charitable or religious. On the trust deed considered, four of five objects were charitable and the family-related object did not change the trust's dominant character, so the property was treated as wholly exempt under the provision.

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Issues: (i) Whether the trust property was liable to wealth-tax under section 5(1)(i) of the Wealth-tax Act, 1957 only if the trust was wholly for a public charitable or religious purpose; (ii) whether the trust property was wholly exempt under section 5(1)(i) on a proper construction of the trust deed.

Issue (i): Whether the trust property was liable to wealth-tax under section 5(1)(i) of the Wealth-tax Act, 1957 only if the trust was wholly for a public charitable or religious purpose.

Analysis: The exemption provision in the Wealth-tax Act was compared with section 4(3)(i) of the Indian Income-tax Act, 1922. The omission of the word "wholly" from section 5(1)(i) was treated as deliberate. Since apportionment is possible in relation to income but not to the corpus of property, the provision was construed as requiring the trust, viewed as a whole, to be primarily or predominantly for a public charitable or religious purpose, not wholly so.

Conclusion: The requirement of exclusivity was rejected. It was enough if the trust was primarily or predominantly for a public charitable or religious purpose.

Issue (ii): Whether the trust property was wholly exempt under section 5(1)(i) on a proper construction of the trust deed.

Analysis: On the terms of the deed, the objects were conjunctive and four out of five objects were charitable in nature. The family-related object did not alter the dominant character of the trust. The trust was therefore regarded as a whole as falling within the statutory exemption.

Conclusion: The trust property was wholly exempt under section 5(1)(i) of the Wealth-tax Act, 1957.

Final Conclusion: The reference was answered by holding that the statutory exemption was available because the trust, taken as a whole, was predominantly charitable, and the assessee succeeded on the exemption issue.

Ratio Decidendi: For exemption under section 5(1)(i) of the Wealth-tax Act, 1957, it is sufficient that the property held under trust is predominantly for a public charitable or religious purpose; the trust need not be wholly devoted to such purpose.

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