Full Judgment Text
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PETITIONER:
COMMISSIONER OF WEALTH-TAX, CALCUTTA
Vs.
RESPONDENT:
O.M.M. KlNNISON (DEAD) THROUGH HER EXECUTORS & T:RUSTEES
DATE OF JUDGMENT29/08/1986
BENCH:
PATHAK, R.S.
BENCH:
PATHAK, R.S.
MUKHARJI, SABYASACHI (J)
CITATION:
1986 AIR 2019 1986 SCR (3) 674
1986 SCC (4) 297 JT 1986 295
1986 SCALE (2)355
ACT:
Wealth Tax Act, 1957: s. 6, cl. (i)-Asset-A right in
the nature of a chose-in-action enforceable in England-
Whether liable to wealth tax.
HEADNOTE:
’A’, a company, the managing agents of two Indian
companies entered into a sub-partnership with one ’B’ in
1907 and shared equally the emoluments from the managing
agency. ’B’ died in 1316 leaving a Will bequeathing all his
property to his wife ’C’. ’C’ executed two deeds of
assignment in 1927 assigning her share of the emoluments
under the sub-partnership in favour of her son ’D’, who
began to receive the half share of the emoluments from the
managing agency. ’D’ executed a Will in 1935 appointing his
wife and a solicitor as executors and trustees upon trust of
his real and personal estate. ’D’ who was domiciled in
England died in 1943. The High Court in England granted
probate of the Will in June, 1943. Letters of
Administration were obtained in India in August, 1944. The
widow of ’D’ was a non-resident and not a citizen of India.
The Will inter alia empowered the two trustees to sell,
call in and convert into money such parts of the estate as
may not consist of money, at such time and in such manner as
they thought fit, postponing such sale and conversion for
such period as they thought proper. They were enjoined after
meeting the funeral and testamentary expenses, and debts and
legacies to invest the residue of the ready monies arising
from such calling in and conversion of the estate, with the
consent of the assessee during her life and afterwards at
the discretion of the trustees, in the investments
authorised under the Will and to transpose with investments
into others, and to stand possessed of the residue of such
monies and all investments and the income thereof upon trust
subject to the further powers and provisions declared under
the Will. It was provided that the trustees would pay the
income of the residuary trust fund to the assessee during
her life. After the death of the assessee the trustees would
stand possessed of the residuary trust fund in trust for
675
the benefit of the testator’s children in accordance with
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the further provisions of the Will.
The corpus of the trust consisted of certain shares in
an Indian company and the income from the managing agency of
the Indian companies. The question that arose was whether
the widow of ’D’ was liable to wealth tax on her interest in
the Indian assets in the hands of the trustees. The Wealth
Tax officer assessed her to tax for the assessment years;
1957-58 to 1962-63.
The appeals filed against the assessments were
dismissed by the Appellate Assistant Commissioner, who held
that the assessee possessed rights and interest in the
shares and the managing agency which were tangible moveable
properties located in India and, therefore, subject to
wealth tax under the Act.
In appeals before the Appellate Tribunal it was
contended by the assessee that the assets held by her were
situated outside India and being a non-resident she was not
taxable thereon. Alternatively it was urged that she was
entitled to exemption under sub-cl. (iv) of cl. (e) of s.2
of the Wealth Tax Act. The Tribunal held that the assessee
who has a life interest in the testamentary trust estate
comprising inter alia of the shares in an Indian Company and
commission from the managing agency of an Indian Company can
be said to have an interest in such shares and commission
and that such interest is property located in India so as to
be taxable under the Wealth Tax Act. It further held that
the life interest of the assesee in the testamentary trust
estate is not an annuity which is exempt under s. 2(e)(iv)
of the Wealth Tax Act.
The matter was referred to the High Court at the
instance of the assessee. It took the view that the right
which the assessee acquired h under the trust was a right to
have the trust administered in accordance with the
provisions of the Will. While the legal ownership of the
trust properties including the shares and the managing
agency, vested in the trustees and remained so vested, the
beneficial interest of the assessee did not extend to any
right in any of the trust properties in specie and did not
confer upon her any right of ownership over any property. (,
Having regard to the nature and character of the right
considered with the nature and extent of the powers
conferred on the trustees to deal with the estate before the
assessee could be said to have any right to the residual
income, and the fact that the appropriate forum for the
administration of the trust estate and for enforcement of
the rights of the beneficiary under the Will were the
appropriate courts in England, I I
676
the High Court held that the assets of the assessee must be
regarded as foreign assets and, therefore, not located in
India. The Revenue obtained a certificate under s. 23 of the
Act and preferred appeals to this Court
On the question whether during the year ending on the
valuation date the assessee’s life interest in the
testamentary estate of her husband consisting of the Indian
shares and the commission from the managing agency of the
Indian companies could be said to constitute an asset
located outside India, and whether the assessee was entitled
to the benefit of cl. (i) of s. 6 of the Wealth Tax Act.
Dismissing the Appeals,
^
HELD: The asset in question of the assessee was a right
in the nature of a chose-in-action enforceable in an
appropriate Court in England and, therefore, must be
regarded as a foreign asset, an asset not located in India.
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The assessee was, therefore, entitled to the benefit of cl.
(i) of s. 6 of the Wealth Tax Act. [686C]
On the relevant valuation dates the estate of the
testator had not been completely and finally administered
and the trustees had not proceeded to the point where it
could be said that there was a clear and ascertained residue
from which the income payable to the assessee as a
beneficiary under the Will could be known, and whether the
assessee was entitled to income arising from the Indian
shares and the managing agency of the lndian Companies. All
that the assessee was then entitled to was the right to have
the trust administered. [685G-H; 686A]
Having regard to the several considerations patent in
this case that the settlement was an English settlement
created by an Englishman who was resident in England, that
it was an English Will proved in England, and the trustees
were residents in England and moreover that the assessee,
the beneficiary, was an English woman, who was also residing
in England, the High Court rightly held that the right of
assessee was in the nature of chose-in-action enforceable in
England. [686B-C]
Attorney General v. Johnson, [1907] 2 K.B. 885; In re
Smyth, [1898] 1 Ch. 89; Sudeley (Lord) v. Attorney General,
[1897] Appeal Cases 11; Philipson-Stow and others v. Inland
Revenue Commissioners, [1961] Appeal Cases 727; Skinner and
others v. Attorney General, [1939] 3 All E.R. 787; In re
Smith, Decd. Executor Trustee and Agency
677
Company of South Australia Ld. v. Inland Revenue
Commissioners, A [1951] I Ch 360; Commissioner of Stamp
Duties (Queensland) v. Hugh Duncan Livingston, [1965] Appeal
Cases 694; Dr. Barnardo’s Homes v. Special Income Tax
Commissioners, [1921] 2 Appeal Cases 1; A. & F. Harvey Ltd.
as Agents to Executors of the Estate of late Andrew Harvey
v. Commissioner of Wealth Tax, [1977] 107 I.T.R. 326,
referred to.
JUDGMENT:
CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 1181 to
1186 (NT) of 1974
From the Judgment and order dated 16th February, 1973
of the Calcutta High Court in Matter No. 198 of 1968. C
S.C. Manchanda, K.C. Dua and Miss A. Subhashini for the
Appellant.
D.N. Gupta, (not present) for the Respondent.
The Judgment of the Court was delivered by
PATHAK, J. These appeals by certificate granted by the
High Court of Calcutta are directed against a judgment of
the High Court disposing of six wealth tax references on the
following questions of law: E
"I. Whether on the facts and in the circumstances
of the case, the Tribunal is right in holding that
the assessee who has a life interest in the
testamentary trust estate of late C.H. Kinnison
comprising inter alia of the shares in an Indian
company and commission from the managing agency of
an Indian Company can be said to have an interest
in such shares and commission and that such
interest is property located in India so as to be
taxable under the Wealth-Tax Act?
2. Whether on the facts and in the circumstances
of the case, the Tribunal is right in holding that the life
interest of the assessee in the testamentary trust estate of
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late C.H.Kinnison is not an annuity which is exempt under
Section 2(e)(iv) of the Wealth-Tax Act?"
Heilgers & Co. were managing agents of the Kinnison
Jute Mills H
678
Co. Ltd and the Naihati Jute Mills Co. Ltd, both Indian
companies, for several years Heilgers & Co. entered into a
sub-partnership from time to time with James Alexander
Kinnison under which the two shared equally the emoluments
from the managing agency. The last of such sub-partnership
agreements was entered into on December 16, 1907
Kinnison died on April 13, 1916 leaving a will dated
June 2, 1916 under which he gave all his property to his
wife Helen. Helen Kinnison executed two deeds of assignment
dated December 12, 1927 assigning her share of the
emoluments under the sub-partnership in favour of her son
Clive Hastings Kinnison. Thereafter the son began to receive
the half share of emoluments from the managing agency.
On February 25? 1935 Clive Hastings Kinnison executed a
will appointing his wife, olive Kinnison, and one William
John Collyer, a solicitor, as executors and trustees, and
under the terms of the will be gave a pecuniary legacy of f
5000 to his wife and devised and bequeated his real and
personal estate to the trustees upon trust to apply the
income from the trust estate in accordance with the
provisions of the will, Clive Hastings Kinnison, who was
domiciled in England, died on March 9, 1943. The High Court
of Justice in England granted probate of the will on June 1,
1943. The net value of the personal estate was determined at
7, 73, 978 and the estate duty payable in the United
Kingdom amounted to 5, 34, 544 l0 s. 5 d. Letters of Ad
ministration were obtained in India on August 23. 1944 and
the stamp duty paid at the time of obtaining the Letters of
Administration amounted to Rs.4,44,258.
The widow, olive Kinnison, was non-resident and not a
citizen of India. The question arose whether she was liable
to wealth tax on her interest in the Indian assets in the
hands of the trustees. The average income dervied by her
during the three years preceding the date of valuation,
March 9, 1957 relevant to the assessment year 1957 58
totalled Rs.3,25,585. She was then 63 years of age. Taking
the average income into account and applying the appropriate
multiplying factor in order to arrive at the capital value
of the assets in her hands, the Wealth Tax officer computed
the net wealth at Rs.20,34,906. Adopting the assessment year
1957-58 as typical of these years, similar wealth tax
assessments were made for the assessment years 1958-59 to
1962-63.
The assessee appealed against the wealth-tax
assessments before
679
the Appellate Assistant Commissioner and contended that she
was a non-resident and that the value of the assets located
outside India should be excluded in computing the total
wealth. The corpus of the trust consisted of certain shares
in an Indian company and the income from the managing agency
of the Indian Companies. The contention was repelled by the
Appellate Assistant Commissioner, who held that the assessee
possessed rights and interest in the shares and the managing
agency which were tangible moveable properties located in
India and, therefore, subject to wealth-tax under the Wealth
Tax Act. He rejected also the contention regarding the
valuation of the assets.
The assessee then appealed for all the six assessment
years to the Appellate Tribunal. She contended that the
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assets held by her were situated outside India, and being a
non-resident she was not taxable thereon. Alternatively. she
urged that she was entitled to exemption under sub-clause
(iv) of clause (e) of s. 2 of the Wealth Tax Act. The
Appellate Tribunal did not accept either contention and
dismissed the appeals.
At the instance of the assessee the Appellate Tribunal
referred the two questions of law set out earlier to the
High Court of Calcutta for each of six assessment years. By
its judgment dated February 16, 1973 the High Court answered
the first question in favour of the assessee and against the
Revenue and the second question in favour of the Revenue and
against the assessee. Thereafter the Revenue obtained a
certificate under s. 29 of the Wealth Tax Act to enable it
to prefer an appeal to this Court against the judgment of
the High Court on the first question.
In this appeal we are concerned solely with the
question whether the assessee is entitled to the benefit of
cluase (i) of s. 6 of the Wealth 1: Tax Act. Clause (i) of
s. 6 provides:
"6. In computing the net wealth of an individual
who is not a citizen of India, or of an individual
or a Hindu undivided family not resident in India
or resident but not ordinarily resident in India,
or of a company not resident in India (i during
the year ending on the valuation date-
(i) the value of the assets and debts located
outside India;
(ii) xx xx xx
680
shall not be taken into account."
The clause provides for the exclusion of the value of the
assets and debts located outside India when computing the
net wealth of an individual who is not a citizen of India or
not resident in India or resident but not ordinarily
resident in India. It is not disputed that the assessee is a
non-resident, and therefore, the only question is whether
during the year ending on the valuation date her life
interest in the testamentary estate of her husband Clive
Hastings Kinnison consisting of the Indian shares and the
commission from the managing agency of the India companies
could be said to constitute an asset located outside India.
To resolve the question it is necessary to advert to
some of the provisions of the will executed by Clive
Hastings Kinnison. After setting forth certain bequests,
including one of a pecuniary legacy to the assessee in the
sum of 5000 to be paid to her upon his death, the
testator devised and bequeated all his real and personal
estate to two trustees upon trust that they would at such
time and in such manner as they thought fit sell, call in
and convert into money such parts of this estate as may not
consist of money, postponing such sale and conversion for
such period as they thought proper, but all this without
diminishing or abridging their statutory power of
appropriation and without affecting the treatment and
application of the income accruing from the estate for the
time being remaining unsold from the time of the testator’s
death as if it was income from investments directed under
the will. The trustees were enjoined, after meeting the
funeral and testamentary expenses and debts and legacies, to
invest the residue of the ready monies arising from such
calling in and conversion of the estate, with the consent of
the assessee during her life and afterwards at the
discretion of the trustees, in the investments authorised
under the will and to transpose such investments into
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others, and to stand possessed for the residue of such
monies and all investments and the income thereof upon trust
subject to the further powers and provisions declared under
the will. It was provided that the trustees would pay . the
income of the residuary trust fund to the assessee during
her life. After the death of the assessee the trustees would
stand possessed of the residuary trust fund in trust for the
benefit of the testator’s children in accordance with the
further provisions of the will. The trustees were also
empowered to exercise the power of appropriation conferred
upon a personal representative by s. 41 of the
Administration of Estate Act, 1925. They were also empowered
to determine what articles
681
would pass under any specific bequest contained in the will
and to A determine whether any monies were to be considered
as capital or income, and whether and in what manner any
expenses or other payments ought to be borne or paid out of
capital or income or apportioned between capital and income
and how valuations were to be made for any purpose of
hotchpot advancement or appropriation or otherwise.
The High Court observed that ordinarily, as the shares
and managing agency were both located in India, the right of
the assessee to receive income out of such trust property
from the trustees would have constituted an asset located in
lndia for the purposes of the Wealth Tax Act, but it held
that having regard to the nature and character of that right
considered together with the provisions relating to the
intervention of the trustees and the special directions and
powers given to them the asset must be regarded as located
outside India. That conclusion, said the High Court, arises
from the nature and extent of the powers conferred on the
trustees to deal with the estate before the assessee could
be said to have any right to the residual income. The High
Court observed that the testator intended that his property
should be converted into personalty and he gave the
necessary directions to the trustees to dispose of the
estate or part thereof by sale. It was pointed out that the
testator never intended that the assessee should have any
share in the trust properties, including the managing agency
and the shares of the Indian companies, nor could the
assessee in her capacity as beneficiary enter into
possession of any of the trust properties nor claim any
right of ownership in any of the trust properties, including
the managing agency and the share. In the opinion of the
High Court, the right which the assessee acquired under the
trust was a right to have the trust administered in
accordance with the provisions of the will. While the legal
ownership of the trust properties including the shares and
the managing agency vested in the trustees and remained so
vested, the beneficial interest of the assessee did not
extend to any right in any of the trust properties in specie
and did not confer upon her any right of ownership over any
property. Having regard to the fact that the settlement
under the will was an English settlement, created by the
will of a testator who was an Englishman and resident of
England, and the will being an English will which was proved
in England, and the trustees to the settlement being
residents of England, and the assessee, the beneficiary, was
an English woman who resided in England, the appropriate
forum for the administration of the trust estate and for
enforcement of the rights of the beneficiary under the will
were the
682
appropriate courts in England. The High Court observed that
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the right of the assessee was a right in the nature of a
chose-in-action enforceable in the appropriate courts of
England, that the nature and character of the asset must be
considered to be foreign in quality, and that the assets of
the assessee must be regarded as foreign assets and
therefore not located in India. In conclusion, the High
Court held that the assesses was entitled to the benefit of
cluase (i) of s. 6 of the Wealth Tax Act.
It will be evident from a perusal of the judgment under
appeal that in reaching its conclusions the High Court
relied principally on Attorney General v. Johnson, [1907] 2
K.B. 885. In that case the testator, who at the time of his
death was entitled to a certain tea estate in Upper Assam,
executed a will appointing two executors and trustees, and
after bequeathing certain legacies he left the residue of
his real and personal estate to the trustees upon trust to
sell the residuary estate (as did not already consist of
money) and, after paying the legacies enumerated in the
will, to invest the residue of the net moneys in the
investments mentioned in the will. The trustees were
directed to apply the annual income arising from the
residuary estate and investments thereof to the payment of
life annuities to certain persons, including one Marie Graf.
The remainder, if any, of the annual income was to be
distributed between a number of persons, including Henry
James Reeves and the said Marie Graf. The trustees were also
directed that until the sale of the estate they were to
carry on the trade or business of a tea planter (which had
been carried on by the testator), and for that purpose to
employ the existing capital and such additional capital as
they considered fit to draw from the residuary estate. Henry
James Reeves and Marie Graf died a few years after the death
of the testator, and the tea estate remained unsold when the
proceedings commenced which have rise to the litigation. The
King’s Bench Division of the High Court held that the share
of the deceased beneficiaries, Henry James Reeves and Marie
Graf, in the surplus income and in the annuities constituted
property not situate out of the United Kingdom and,
therefore, liable to estate duty and succession duty under
the English law. Bray, J., who delivered the judgment, held
that it was the intention of the testator that his property
should be converted into personality, and he had given a
direction to his trustees to sell, that he had never
intended that the beneficiaries named in the will should
have any share of his real estate or of his business, and
that therefore, they could never enter into possession. The
learned Judge emphasised that the testator wished the estate
to be dealt with and
683
managed by his trustees, and not by the beneficiaries. The
testator A merely gave the latter the right of having the
trusts of the will administered in the proper forum, namely,
in the Courts of England, and the net surplus divided
amongst them. He pointed out that it was an English chose-
in-action. In reaching this conclusion, the learned Judge
relied on the observations of Lopes L.J., in Attorney
General v. Lord Sudeley, [1896] I Q.B. 354 and Romer, J. in
in re Smyth [1898] I Ch. 3 89. The former of the two cases
was affirmed in appeal by the House of Lords in Sudeley
(Lord) v. Attorney General, [1897]. Appeal Cases 11. As that
case was the subject of considerable comment in the Courts
in England, reference may be made appropriately to what was
said there. The testator executed a will in which, after
bequeathing various legacies and annuities, he gave all the
residue of his real and personal estate to two executors
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upon trust to pay the income to his wife and after her death
to distribute it between his brother and certain other
persons. The executors and trustees were to leave the
residuary personal estate invested as they found it at the
time of the testator’s death unless they considered it
proper to change any investment. By a codicil he revoked the
gift to his brother and gave that share to his wife
absolutely. The testator was domiciled in England, and upon
his death the will and codicil were proved in England by his
executors, who were themselves domiciled in England, but the
testator’s estate included mortgages of real estate in New
Zealand. The wife died in 1893, and her will likewise was
proved in England by her executors (the appellants), two of
whom were also her husband’s executors. In estimating the
probate duty payable upon her one-fourth share of her
husband’s residuary personal estate, the appellants excluded
the value of the New Zealand mortgages. The Attorney General
claimed that one forth of the value of the New Zealand
mortgages ought to have been included for the purposes of
probate duty. In resisting the claim the appellants stated
that at the time of the wife’s death her husband’s personal
estate had not been fully administered and was in the course
of administration, that one legacy given by the will then
remained unpaid, and that the amount of the clear residue
had not yet been ascertained but it was envisaged that there
would be a large residue excluding the New Zealand mortgages
over and above the debts and legacies. It asserted that no
appropriation had been made of the New Ci Zealand mortgages,
nor of any securities or portions of securities to
particular shares of the net ultimate residue. The House of
Lords held that the right of the wife’s executors did not
extend to one-fourth or any part of the mortgages in specie
but consisted of the right to require her husband’s
executors to administer his personal estate and to receive
from them a one-fourth part of the clear residue, and that
this H
684
was an English asset of the wife’s estate, and therefore,
probate duty was payable under her will upon one-fourth part
of the value of the New Zealand mortgages. Lord Halsbury,
L.C. Observed:
"Now, if the only things that the legatee is
entitled to is the fourth share of an ascertained
residuary estate, I say that to 13 my mind it is
impossible to maintain that the character of any
part of that estate can be ascertained so as to
make it possess a specific locality until that has
happened; it is a condition precedent to know what
the residuary estate is, and until that has been
ascertained you cannot tell of what it will
consist. The right of the person to bring an
action or to insist upon the performance of the
trust may be one thing; but I want to know what
the things is, and until I ascertain that, and
until the thing comes into existence, it appears
to me the question does not arise. Well, if that
is right, then the thing that the legatee is
entitled to, call it a debt, call it something
that must be administered either by trustee or
executor, the character of that, the local charac-
ter, is fixed by the persons, call them debtors or
call them trustees, I do not care which. Under
these circumstances it appears to me there can be
but one answer to the question, and that is that
the debtors are here and have to administer here.
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The fixing of the character of the asset by the
presence of the debtor may or may not have been
logical, but it is so; and if it is a debt and the
debtor is here, that is the character of the asset
as fixed by the residence of the debtor, and the
asset is English."
To the same effect, Lord Herschell pointed out:
" ......... until the estate is fully administered
it is impossible to say of what assets the residuary estate
will consist; we do not know how much the amount of the debt
remaining unpaid was in the present case, and there was only
one legacy unpaid...... In truth, the right she had was to
require the executors of her husband to administer his
estate completely, and she had an interest to the extent of
one-fourth in what should prove to be the residuary estate
of the testator, Algernon Tollemache. Well, where was that
situate? It seems to me that it can only be said to have
been situate in this country."
685
Lord Macnaghten and Lord Shand were of the same opinion.
Lord A Davey pointed out that at the time of the lady’s
death the testator’s personal estate had not been fully
administered and the amount of the clear residue had not
been ascertained, and that the lady "at the time of her
death had no right of property in or right to claim any part
of the mortgages in specie, and that the appellants, her
executors, acquired only a right to have the estate duly
administered and to enforce that right by an action for the
purpose."
In Philips on-Stow and others v. Inland Revenue
Commissioners [1961] Appeal Cases 727 the House of Lords
doubted the correctness of Attorney General v. Johnson
(supra), and in Skinner and others v.Attorney General,
[1939] 3 All E.R. 787 and in In re SMITH,. Deed, Executor
Trustee and Agency Company of South Australia Ld. v.Inland
Revenue Commissioners [1931] I Ch 360 considerable
difficulty was expressed by the Court in following Sudeley
(Lord) v. Attorney General (supra). But subsequently the
Judicial committee of the Privy Council in Commissioner of
Stamp Duties (Queensland) v. Hugh Duncan Livingston, [1965]
Appeal Cases 694 pointed out that Sudeley (Lord) v. Attorney
General (supra) had been reaffirmed by the House of Lords in
Dr. Barnardo’s Homes v. Special Incomc Tax Commissioner
[1921] 2 Appeal Cases 1 and that it was in no way qualified
by Skinner and others v. Attorney General (supra). In our
own country, the Madras High Court has held in A. & F.
Harvey Ltd. as Agents to Executors of the Estate of late
Andrew Harvey v. Commissioner of Wealth Tax, [19771 107
I.T.R. 326 a case where under the terms of a will executed
and probated in England, the beneficiary, who was a resident
in England, was to be paid by the executors who were also in
England, the dividends on certain shares of a company in
India, that the right which the beneficiary had was merely a
right to proceed against executors for the purpose of
claiming the income referable to the shares in question, and
that such right could not be regarded as an asset situated
in India, and therefore, the value thereof could not be
brought to tax under the Wealth Tax Act.
ln the present case, it does not appear that on the
relevant valuation dates the estate of the testator had been
completely and finally administered and that the trustees
had proceeded to the point where it could be said that there
was a clear and ascertained residue from which the income
payable to the assesee as a beneficiary under the will could
be known, and whether the assessee was entitled to income
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arising from the Indian shares and the managing agency of
the Indian com- H
686
panies. All that the assessee was entitled to on the
valuation dates was the right to have the trust administered
and, as the High Court has observed, having regard to the
several considerations patent in this case that the
settlement was an English settlement, created by, an
Englishman who was resident in England, that it was an
English will proved in England and the trustees were
residents in England. and moreover that the assessee, the
beneficiary, was an English woman who was also residing in
England, therefore the proper forum for the enforcement of
the rights of the beneficiary under the will was- the
appropriate Court in England. We agree with the High Court
that asset in question was a right in the nature of a chose
in action enforceable in England. The right of the assessee
was a right enforceable in that Court and, therefore, must
be regarded as a foreign asset, an asset not located in
India.
We affirm the answer returned by the High Court to the
first question referred to it, and agree that the question
must be answered in the negative, in favour of the assessee
and against the Revenue and that the appeal must, therefore,
be dismissed.
As the respondent has not entered appearance in this
appeal there is no order as to costs.
P.S.S. Appeals dismissed.
687