Beneficial ownership governs share exemption under wealth-tax law, but the statutory ceiling under section 5(1A) still applies.

Beneficial ownership, not merely legal title, governed the exemption claim for shares held through trustees under the Wealth-tax Act, 1957. Where a beneficiary was assessed on the beneficial interest in the trust property, the corresponding exemption under section 5(1)(xxiii) could not be denied simply because the trustees held legal title. The exemption was held available to the beneficiary in respect of the shares, but only within the statutory ceiling prescribed by section 5(1A), having regard to the assessee's other assets.

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Issues: Whether a beneficiary under a private trust can claim exemption under section 5(1)(xxiii) of the Wealth-tax Act, 1957 in respect of shares held by the trustees, and whether such exemption is subject to the ceiling under section 5(1A).

Analysis: The exemption claim turned on whether the expression requiring ownership of shares should be confined to legal ownership or extended to beneficial ownership. Although the legal title in the shares stood in the trustees, the beneficiary was assessed to wealth-tax on the beneficial interest and could not be denied the corresponding exemption merely because the trust arrangement placed legal title in the trustees. The provisions relating to charge and computation of wealth were read as recognising beneficial ownership for tax purposes, making a consistent approach necessary. The exemption was therefore held applicable to the beneficiary, but only within the statutory maximum prescribed by section 5(1A), taking into account the assessee's other assets.

Conclusion: The beneficiary was entitled to exemption under section 5(1)(xxiii) of the Wealth-tax Act, 1957, subject to the limit under section 5(1A).

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