2001 (3) TMI 17

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....AYASIMHA BABU J. -The question requiring our consideration is as to whether the contingent interest of the beneficiary can be regarded as an asset for the purpose of levy of wealth-tax. The assessment years are 1976-77 to 1982-83. The assessees had claimed that, such interest was not taxable, and that in the event of it being considered capable of being brought to tax, the same will have to be val....

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....sion enabling assessment to be made on the trustee in a representative capacity." In the assessment made by the Wealth-tax Officer, the beneficial interest of the assessees in the trust property was not valued in accordance with the mode of valuation set out in the judgment of the Supreme Court in the case of CWT v. Trustees of H. E. H. Nizam's Family (Remainder Wealth) Trust [1977] 108 ITR 555....

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....to agree with the view expressed in that judgment that a contingent interest is not an asset. The fact that the asset is contingent is relevant for the purpose of valuation. But, it remains an asset which requires to be valued as it constitutes an asset of the assessees who admittedly have a right to receive the corpus of the trust at a future point of time. In this case, the trust deed is date....

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....sistence of the trust, had 1/4th beneficial interest in the corpus of the trust, and were entitled to receive the corpus of the trust at the end of the 15 year period to the extent of 1/4th each of that corpus. The mere fact that the rights of the assessees to receive the corpus of the trust stood postponed by 15 years, during which the assessees were only entitled to a share in the income of t....