TaxTMI 
TaxTMI 
2009 (3) TMI 502
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....etuity such property on himself and the male heirs of his family who might succeed him in such baronetcy, as should be adequate to support the dignity of the title conferred on him. Sir Jamsetjee Jejeebhoy was therefore, desirous of settling in trust a corpus consisting of Government promissory notes which would derive an yearly income of Rs.1.00 lakh and a mansion house and hereditaments called "Mazagaon Castle" for meeting the aforesaid condition. However, before the trust could be settled, on April 14, 1859, Sir Jamsetjee Jejeebhoy expired leaving behind a will by which he devised his estate to his three male sons and appointed his wife as well his sons as the executrix and executors of the said will. (b) On the death of Sir Jamsetjee Jejeebhoy the title of baronet devolved on his eldest son Cursetjee Jamsetjee. All the heirs and the executors as well as executrix were desirous of fulfilling the commitment of Sir Jamsetjee Jejeebhoy of settling in trust the aforesaid Government promissory notes and Mazagaon Castle and in view of such expressed desire, the Government enacted Act No. XX of 1860 which created a trust comprising the aforesaid Government promissory notes and Mazagao....
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....5 by Maharashtra Act No. XXVIII of 1974 and the trustees in respect of both the trusts were substituted by the official trustee appointed under the Official Trustees Act of 1913. There were other changes which were made, some of which pertained to the nature of the corpus of the trust but those changes would be irrelevant for the purpose of deciding this reference. 5. The record indicates that in 1980-81, the official trustee filed a wealth-tax return of the Sir Jamsetjee Jejeebhoy Baronetcy Trust. He valued the corpus of the trust at Rs. 19,78,855 and the value of the life interest of the then living baronet Sir Jamsetejee Jejeebhoy at Rs. 4,00,000. The Wealth-tax Officer by his order dated November 12, 1985, assessed the returns and after giving a deduction in respect of the life interest of Sir Jamsetjee Jejeebhoy, a deduction in respect of the interest of Lady Soonabai and a deduction under section 5(1) of the Wealth-tax Act, estimated the net wealth as Rs. 13,39,500. The official trustee then filed an appeal before the Appellate Assistant Commissioner of Income-tax and contended that on the wording of section 21(1), a trust created by Act of the Legislative Council of India w....
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.... the purpose or purposes of the trust, particulars as to the trustee or trustees, the beneficiary or beneficiaries and the trust property, is forwarded to the Assessing Officer-, (i) where the trust has been declared before the 1st day of June, 1981, within a period of three months from that day ; and (ii) in any other case, within three months from the date of declaration of the trust. (1A) Where the value or aggregate value of the interest or interests of the person or persons on whose behalf or for whose benefit such assets are held falls short of the value of any such assets, then, in addition to the wealth-tax leviable and recoverable under sub-section (1), the wealth-tax shall be levied upon and recovered from the court of wards, administrator-general, official trustee, receiver, manager or other person or trustee aforesaid in respect of the value of such assets, to the extent it exceeds the value or aggregate value of such interest or interests, as if such excess value were the net wealth of an individual who is a citizen of India and resident in India for the purposes of this Act, and- (i) at the rates specified in Part I of Schedule I ; or (ii) at the rate of three pe....
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....sidered as subject to the provisions of section 21 of the above Act. In the said case, the apex court held that the Revenue had two modes available for assessing the interest of the beneficiary of a trust property. It must either assess it in the hands of a trustee in a representative capacity under sub-section (1) of section 21 or assess it directly in the hands of the beneficiary by including it in the net wealth of the beneficiary. In either case what is taxed is the interest of the beneficiary in the trust property and not the corpus of the trust property. Question No. 1, as reproduced above, was answered in favour of the revenue and question No. 2 was answered in favour of the assessee. The apex court conclusively held that the trustee of the trust, therefore, cannot be assessed to wealth-tax in respect of the trust property under section 3. The aforesaid judgment of the apex court clearly lays down that the only charging section to charge tax upon the trustee of the trust covered by section 21(1) is section 21 and not section 3 of the Wealth-tax Act, 1957. 11. The question which is raised, however, is that the trustee who has been appointed by operation of statute cannot be ....
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....reenacted rule. 14. While dealing with the aforesaid contention a Division Bench of this court observed as under (page 262 of AIR 1944 (Bom): "But the difficulty in the way of the prosecution is that to bring the order of delegation within the provisions of section 8(1) of the General Clauses Act they must how that the order of delegation is an 'instrument' within the meaning of that section, so that the reference to rule 26 in the order of the delegation can be interpreted as a reference to rule 26 as it might hereafter be reenacted. We are not satisfied that the order or delegation can be deemed to be an instrument within the meaning of section 8 and it is conceded that it cannot be regarded as an enactment. We have looked into Stroud's Judicial Dictionary and Wharton's Law Lexicon for enlightenment on the point. We find, generally speaking that an 'instrument' is a writing usually importing a document of a formal legal kind, but that it does not include Acts of Parliament unless there is a statutory definition to that effect in any Act; and in the absence of authority we are not prepared to hold that an order of Government delegating its powers to District Magistrates is an 'i....
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....1925, section 205(1)(viii), 'instrument' for the purpose of this Act does not include a statute unless the statute creates a settlement. 'An instrument is a writing and generally means a writing of a formal nature. But where there is a power to appoint by any deed or instrument or by will, any writing, such as a letter, which refers to the power or which can have effect only by operating on the fund (such as a cheque or other order for payment), is an instrument. A telegram is an instrument within the meaning of the Forgery Act, 1912, section 7 and so is an envelop with a postmark falsified for the purpose of a betting fraud.' According to the same dictionary, the word 'enact' means to act, perform or effect; to establish by law; to decree and an 'enactment' means an Act of Parliament or statute or any part thereof. A statute, according to Maxwell on Interpretation of Statutes, 11th Ed,. Page 1 is the will of the Legislature, i.e., an edict of the Legislature. A statute is, however, different from a statutory instrument as defined by the Statutory Instruments Act (9 and 10 Geo. 6, C.36,1946 where power to make confirm or approve orders, rules, regulations or other subordinate legis....