Judgement

SIKRI, J. (with Wanchoo, J.) : These appeals by special leave are directed against the judgment of the Mysore High Court in a reference under S. 27 (1) of the Wealth Tax Act (XXVII of 1957) - hereinafter referred to as the Act - answering the question "whether the sums of Rs 4,30,684 and Rs. 4,13,353 being the value of the shares transferred by the assessee to the Sandur Ruler s Family (Second) Trust could be included in the net wealth of the assessee for the assessment years 1958-59 and 1959-60 under the provisions of Section 4 (1) (a) (iii) of the Wealth Tax Act" in favour of the Revenue.

2. The question arose in the following circumstances: The appellant, His Highness Yeshwant Rao Ghorpade, hereinafter referred to as the assessee, held 12,750 shares in Sandur Manganese and Iron Ores Ltd. on March 31, 1957. On August 24, 1957, he created two Trusts; one may be called the Charitable Trust and the other the Sandur Ruler s Family (Second) Trust-may hereinafter be referred to as the Second Trust. The assessee transferred some shares to the Second Trust under conditions contained in the Trust Deed. The Wealth Tax Officer and the Appellate Assistant Commissioner, in computing t