Judgment

BHAGWATI, J.- These appeals by special leave are directed against a judgment of the High Court of Andhra Pradesh answering certain questions referred to it by the Tribunal in favour of the assessee. The questions are of some importance and complexity and they turn on the true interpretation of Sections 3 and 21 of the Wealth Tax Act, 1957 but since they can be answered only by applying the correct interpretation to the facts of the case, it is necessary to briefly recapitulate the facts giving rise to these appeals.

2. In the year 1950 the late Nawab Sir Mir Osman Ali Khan Bahadur, The Nizam of Hyderabad and Berar created several trusts out of which we are concerned in these appeals with the trust known as the Family Trust. The Nizam, by a Deed of Trust dated 16th May, 1950, created the Family Trust by transferring a corpus of Rs. nine crores in Government securities to the trustees constituted by him. The corpus was nationally divided into 175 equal units, out of which five units constituted a Fund called the Reserve Fund, 31/2 units constituted a Family Trust Expenses Fund and the remaining 166 1/2 units were allocated amongst the relatives mentioned in the first column of