Judgment

Shah, J.-These appeals are filed against the Common Judgment and Order dated 8th December, 1987 passed by the High Court of Andhra Pradesh in Referred Case Nos. 37-40 of 1983 in reference made to the High Court under Section 27 of the Wealth Tax Act, 1957. The Income-Tax Appellate Tribunal referred the following question for decision in all the four cases :-

“Whether on the facts and in the circumstances of the case, the Tribu­nal was justified in holding that only the value of the interest of the beneficiary in the Trust could be included in the net Wealth and not the value of the corpus of the Trust itself.”

2. The facts in brief are that one Sri A.V. Reddly of Kadiam in East Godavari District created four trusts for the benefit of his three grand children and daughter. One trust was created for the benefit of his grandson Dexter Anand Sear (eldest son of his daughter, Margaret) and the relevant Trust Deed was executed on 14th March, 1972. Another Trust Deed was created on 3rd October, 1970 for the benefit of the Settlor’s grand-son, Harish Reddy. Third Trust Deed was created on 2nd October, 1970 for the benefit of the Settlor’s grand-son, B.V. Satish Reddy and fourth Trust Deed was created on 6th July, 1971 for Sett­lor’s second daughter Mrs. Lalitha Anderson. The trust deeds were similar; the author of the trust constituted himself as the sole trustee; he had the discretion to apply whole or any portion of the income for the beneficiary and accumulate the residue by investing; the Trust funds were to be transferred and made over to the benefici­ary of the trust after completion of the age of 45 years in the case of his daughters and 25 years in the case of his grandsons; if the object of the trust cannot be fulfilled the trust property was to be applied for the children of the beneficiary or other children. The trusts created by the Settlor are on uniform pattern, namely, at the time of settling the trust, a sum of Rs. 1,116/- was settled with the provision to augment the trusts fund from time to time by further contributions. The Settlor appointed himself as the sole trustee during his lifetime. The trustee A.V. Reddy filed the Wealth-Tax returns for the four trusts showing the entire value of assets held by the trust for the purpose of Wealth Tax assessment. On 27th March, 1980, the Wealth Tax Officer made assessments under Section 16(3) of the Wealth Tax Act.

3. Against those orders, assessee preferred the appeals before the Appellate Assis­tant Commissioner. In those appeals, the method of valuation of the wealth tax was disputed; additional ground was raised by contending that in view of Section 21 which applied to all trusts only interest of the beneficiary should be assessed to wealth tax and not the entire corpus of the trust fund. By order dated 29th November, 1980, the appeals were allowed. The appellate authorities directed the Wealth Tax Officer to assess the beneficial interest according to Section 21(1) or 21(2) of the Wealth Tax Act. Against that order, Wealth Tax Officer preferred appeals before the Income Tax Appellate Tribunal, Hyderabad (hereinafter referred to as “the Tribunal”). The Tribunal arrived at the conclusion that the corpus of the trust was to be transferred to the beneficiary on completing the stipulated age and the intention of the settlor was to vest the corpus in the beneficiary only on reaching the stipulated age. The Tribunal, therefore, held that there was only a contingent interest in the corpus of the trust till the beneficiary attained the stipulated age and what could be included in the hands of the assessee would be the interest of benefi­ciaries in the terms of the trustee and not the corpus of the trust fund itself. The appeals were, therefore, dismissed with clarification with which we are not concerned.

4. The High Court after considering the various contentions and the decision relied upon by the Counsel for the parties and the terms of the trust deed arrived at the