JUDGMENT : STATEMENT OF CASE By these two applications the Commissioner of Wealth-tax, Gujarat-I, Ahmedabad, requires the Appellate Tribunal to state a case on certain questions, said to be questions of law, arising out of the Tribunal's order dated January 28, 1967, passed in W.T. As. Nos. 1989 and 1948 of 1963-64. Inasmuch as, in our opinion, questions of law do arise out of the Tribunal's order, we do hereby consolidate both the reference applications as they pertain to the same assessment year and draw up a common statement of the case and refer the same to the High Court of Gujarat at Ahmedabad under Section 27(1) of the Wealth-tax Act. 2. The statement of the case relates to the assessment year 1959-60 and the relevant valuation date was March 31, 1959. 3. The assessee is Anarkali Sarabhai, who was a minor on the valuation date, relevant to the assessment year 1959-60. The assessee was a beneficiary under trust deeds dated November 3, 1956, and April 24, 1957, executed by her maternal uncles, Shri Gautam Sarabhai and Dr. Vikram Sarabhai, respectively. For the sake of brevity those trusts will hereinafter be referred to as Trust No. 1 and Trust No. 2. On account of love and affection possessed by them for their sister's daughter, the assessee's settlors settled on trust some shares and investments for the benefit of the assessee. Clauses 2(a), (b), (c) and (d) of both the trust deeds, which define the beneficial interest of the assessee in the said trusts, are almost similar. Hence, the relevant clauses of the trust deed executed by Gautam Sarabhai are alone reproduced here. Clauses 2(a), (b), (c) and (d) of both the trust deeds, which define the beneficial interest of the assessee in the said trusts, are almost similar. Hence, the relevant clauses of the trust deed executed by Gautam Sarabhai are alone reproduced here. "(2)(a) The trustees shall pay the net income of the trust funds to the said Anarkali, daughter of the settlor's sister, Bharatidevi Sarabhai, for a period of 18 years from the date of this deed (hereinafter referred to as "the said period"), provided however that during the minority of the said Anarkali the trustees shall be at liberty either to utilise the net income of the trust funds for her support, benefit, education and advancement in life of the said Anarkali or to pay the net income of the trust funds to Bharatidevi Sarabhai, mother of the said Anarkali, as the guardian of the said Anarkali for the said purpose and the receipt of the said Bharatidevi Sarabhai as the guardian of the said Anarkali for the net income shall be a valid and effectual discharge to the trustees who shall not be liable to see to the application thereof. (b) From but not otherwise, and after the expiration of the said period the trustees shall hold the trust funds in trust for the said Anarkali absolutely. (c) If the said Anarkali shall die before the expiration of the said period leaving a child or children her surviving, the trustees shall hold the trust funds in trust for such child or children of the said Anarkali, if more than one in equal shares absolutely, provided however that if the said Anarkali shall die before the expiration of the said period without leaving a child or children her surviving, the trustees shall hold the trust funds for her mother, Bharatidevi Sarabhai, absolutely and if the said Bharatidevi Sarabhai shall not be then living, then in trust for such of the other children or child of the said Bharatidevi Sarabhai as may be living at the death of the said Anarkali, and if more than one in equal shares absolutely. (d) Notwithstanding anything to the contrary herein contained, the trustees shall have absolute power and discretion at any time or times until the expiration of the said period to have recourse to and utilise from time to time any portion or portions of the corpus of the trust funds for the support, education, benefit and advancement in life of the said Anarkali or on the occasion of any serious illness or emergency as the trustees may in their absolute discretion consider proper and necessary and the decision of the trustees to utilise any portion or portions of the corpus of the trust funds under this clause for the benefit of the said Anarkali shall be final and binding on all persons and shall not be liable to be questioned or challenged by any person whatsoever." 4. In brief, as per the above clauses of the trust deeds, for a period of 18 years under Trust No. 1 and 17 years under Trust No. 2 from the date of execution of those respective deeds, the assessee would get the net income of the trust for her maintenance, support, etc., that during her minority either the net income would be paid to her or to her mother, Smt. Bharatidevi Sarabhai, for the maintenance of the assessee. After the expiry of 18 years or 17 years after the dates of the execution of the aforesaid trust deeds, as specified under the trust deeds, the trustees would hold the trust corpus for the benefit of the assessee absolutely. In case the assessee died leaving children behind her and before the expiry of the specified period, then the trust corpus would pass on to her child or children or if she died childless before the expiry of the said period, the trust corpus would pass on to her mother, Smt. Bharatidevi Sarabhai, absolutely. Under certain circumstances, the trustees were also empowered to utilise any portion of the trust corpus for the support, maintenance and benefit of the assessee. Copies of the trust deeds dated November 3, 1956, and April 24, 1957, executed by Shri Gautam Sarabhai and Dr. Vikram Sarabhai form part of the statement of the case, annexures "A" and "B". 5. Under certain circumstances, the trustees were also empowered to utilise any portion of the trust corpus for the support, maintenance and benefit of the assessee. Copies of the trust deeds dated November 3, 1956, and April 24, 1957, executed by Shri Gautam Sarabhai and Dr. Vikram Sarabhai form part of the statement of the case, annexures "A" and "B". 5. In computing the net wealth of the assessee for the assessment year 1959-60, the Wealth-tax Officer considered that the assessee had a restricted interest only for an unexpired portion of her life, say 15 years 8 months, and accordingly capitalised at 4% for 30 years the gross yield and determined the value of the assessee's right on the valuation date in Trust No. 1 at Rs. 1,97,543. On a similar basis the Wealth-tax Officer determined the value of the assessee's interest on the relevant valuation date under Trust No. 2 at Rs. 38,457. 6. In addition to the benefits received by her in the trusts created by her maternal uncles, Shri Gautam Sarabhai and Dr. Vikram Sarabhai, the assessee was also a beneficiary in a trust deed executed by her grand-mother, Smt. Sarladevi Sarabhai, on March 31, 1959. For the sake of brevity the said trust is hereinafter referred to as Trust No. 3. By virtue of clauses (1) and (2) of the trust deed, which are reproduced here, the assessee got a life interest. "(1) During the lifetime of the said Anarkali the trustees shall utilise the net income of the trust funds for the maintenance, support, education and benefit of the said Anarkali Provided However that during the minority of the said Anarkali the trustees shall be at liberty either to utilise the net income of the trust funds for her maintenance, support, education and benefit of the said Anarkali or to pay the net income of the trust funds to Bharatidevi Sarabhai the mother or other guardian of the said Anarkali as the guardian of the said Anarkali for the said purpose and the receipt of the said Bharatidevi Sarabhai as the guardian or of other guardian of the said Anarkali for the net income shall be valid and effectual discharge to the trustees. (2) From and after the death of the said Anarkali the trustees shall hold the trust funds upon trust for such person or persons or object or objects or purpose or purposes in such manner and in such proportions and at such time or times as the said Anarkali may by deed or will or codicil appoint without transgressing the provisions of sections 13 and 14 of the Transfer of Property Act or sections 113 and 114 of the Indian Succession Act and in the absence or default of such appointment or in so far as such appointment shall not extend, the trustees shall hold the trust funds upon trust absolutely for the child and/or children of the said Anarkali and if more than one in equal shares absolutely provided however that if there is no child of the said Anarkali who shall take a vested interest in the trust funds the trustees shall hold the trust funds in trust absolutely for the child or children of Bharatidevi Sarabhai, daughter of the settlor, and if more than one, in equal shares absolutely, provided further that if there shall be no child or children of the said Bharatidevi Sarabhai who shall take a vested interest in the trust funds the trustees shall hold the trust funds in trust absolutely for the settlor's daughter, Bharatidevi Sarabhai, provided further that if the said Bharatidevi Sarabhai shall not then be alive the trustees shall hold the trust funds upon trust for such person or persons or object or objects or purpose or purposes in such manner and in such proportions and at such time or times as the said Bharatidevi Sarabhai may by will or codicil appoint without transgressing the provisions of sections 13 and 14 of the Transfer of Property Act and sections 113 and 114 of the Indian Succession Act." 7. Thus according to the above clauses, the assessee was to be paid for her life the net income of the trust corpus for her maintenance, support, etc., and during her minority the trustees were at liberty to pay such income to the assessee or to her mother, Smt. Bharatidevi Sarabhai, for the maintenance of the assessee. Thus according to the above clauses, the assessee was to be paid for her life the net income of the trust corpus for her maintenance, support, etc., and during her minority the trustees were at liberty to pay such income to the assessee or to her mother, Smt. Bharatidevi Sarabhai, for the maintenance of the assessee. After her death the trust corpus would be held by the trustees for the benefit of such person, whom the assessee during her lifetime appointed by a deed or will and in default of such an appointment, to her children, if any. In no case did the assessee get any right to the corpus of the trust. 8. Before the Wealth-tax Officer the dispute centred around the question as to how the value of her life interest in the corpus of the trust was to be determined. According to the assessee, the net dividends on the shares settled on trust was to be capitalised, but the Wealth-tax Officer rejecting her contention, determined the value of her life interest in the said Trust No. 3 by capitalising the gross dividends and the figure so arrived at by him was Rs. 4,27,000. A copy of the trust deed dated March 31, 1959, executed by Smt. Sarladevi Sarabhai forms part of the statement of the case as annexure "C". A copy of the assessment order forms part of the statement of the case as annexure "D". 9. The assessee then filed an appeal to the Appellate Assistant Commissioner against the assessment. Before the Appellate Assistant Commissioner the assessee objected to the values of the various interests she possessed in Trusts Nos. 1, 2 and 3 on the ground that they were high. The assessee also furnished before the Appellate Assistant Commissioner certain principles of computation of the value of the rights possessed by her in the different trusts. On the other hand, the Wealth-tax Officer submitted before the Appellate Assistant Commissioner that while making the assessment he had not considered and included in the net wealth of the assessee the value of the assessee's interest in the corpus of the Trusts Nos. 1 and 2, and, therefore, the assessment in that respect called for enhancement. As against that argument, the assessee contended that the interest possessed by her in the corpus of the Trusts Nos. 1 and 2, and, therefore, the assessment in that respect called for enhancement. As against that argument, the assessee contended that the interest possessed by her in the corpus of the Trusts Nos. 1 and 2 was only a mere possibility of succeeding to the corpus contingent on her survival and an interest of that type was inalienable under Section 6 of the Transfer of Property Act and that the value of such an interest was "nil". 10. Considering the submissions made before him, the Appellate Assistant Commissioner held that the interest in the corpus possessed by the assessee in Trusts Nos. 1 and 2 amounted to spes successions and incapable of alienation according to Section 6 of the Transfer of Property Act. He did not, therefore, go into the question whether such an interest as spes successions could be an asset within the meaning of Section 2(m) of the Wealth-tax Act. Instead he, however, held that the value of such an interest was "nil" as it was not capable of alienation in any manner. 11. Accepting some and rejecting other arguments, the Appellate Assistant Commissioner directed the Wealth-tax Officer to recompute the value of the assessee's interest in the various trusts in accordance with what he had stated in his order. Their values were accordingly determined by the Wealth-tax Officer at Rs. 42,991 for Trusts Nos. 1 and 2, and Rs. 3,61,635 for Trust No. 3 by giving effect to the Appellate Assistant Commissioner's order. A copy of the Appellate Assistant Commissioner's order forms part of the statement of the case as annexure "E". 12. Aggrieved by the order of the Appellate Assistant Commissioner both the assessee and the Wealth-tax Officer filed appeals to the Appellate Tribunal. In her appeal the assessee objected to the value of her life interest, which she possessed in Trust No. 3 as being high. In his appeal the Wealth-tax Officer objected to the Appellate Assistant Commissioner's findings that the assessee's interest in the corpus of the Trusts Nos. 1 and 2 amounted to spes successions and that their value was "nil". 13. In his appeal the Wealth-tax Officer objected to the Appellate Assistant Commissioner's findings that the assessee's interest in the corpus of the Trusts Nos. 1 and 2 amounted to spes successions and that their value was "nil". 13. At the time of hearing of the appeals the learned counsel appearing for the assessee raised an additional ground in the assessee's appeal to the effect that the life interest possessed by the assessee in Trust No. 3 constituted an annuity and was exempt from taxation under Section 2(e)(iv) of the Wealth-tax Act. Since the contention was purely a legal one the Tribunal admitted the contention. 14. In the appeal filed by the Wealth-tax Officer, the Tribunal agreed with the view expressed by the Appellate Assistant Commissioner that the interest in the corpus possessed by the assessee in Trusts Nos. 1 and 2 was only spes successions, value of which was "nil", because it was inalienable. In the assessee's appeal following the decision of the Gujarat High Court in Commissioner of Wealth-tax v. Dr. E. D. Anklesaria, (1964) 53 I.T.R. 393 (Guj.), in preference to the decision of the Calcutta High Court in Ahmed G.H. Ariff v. Commissioner of Wealth-tax, (1966) 59 I.T.R. 230 (Cal.), the Tribunal upheld the objection raised by the assessee and accordingly held that the life interest possessed by the assessee in Trust No. 3 was an annuity, which was exempt from tax under Section 2(e)(iv) of the Wealth-tax Act. The Tribunal preferred to follow the decision of the Gujarat High Court, because it was bound by it in this particular case, as the reference against that decision lay to the Gujarat High Court. A copy of the Tribunal's order forms part of the statement of the case as annexure "F". 15. The copies of the draft statement were served on the parties requiring them to make their suggestions, if any, to the draft statement. Minor suggestions made by the departmental representative have been accepted and additions made accordingly in the statement. Both the parties suggested a change in the wording of the questions Nos. 1 and 3 framed by the Tribunal. The assessee's suggestion that question No. 1 should be reframed in the manner suggested by the assessee's counsel is accepted and the question accordingly reframed. Both the parties suggested a change in the wording of the questions Nos. 1 and 3 framed by the Tribunal. The assessee's suggestion that question No. 1 should be reframed in the manner suggested by the assessee's counsel is accepted and the question accordingly reframed. Question No. 2 is retained and the department's suggestion to change the wording of question No. 3 is not acceptable, because in our view the question as framed by us covers all the aspects argued before the Tribunal. The department's suggestion is, therefore, not accepted. The statement is accordingly finalised. 16. On the above facts, the following questions of law do arise out of the Tribunal's order and are referred to the High Court of Gujarat at Ahmedabad : "(1) Whether, on the facts and in the circumstances of the case and on a proper construction of the provisions of the trust deed dated November 3, 1956, executed by Shri Gautam Sarabhai and dated April 24, 1957, executed by Dr. Vikram A. Sarabhai, was the Tribunal right in holding that the assessee had no interest in the corpus of the said two trusts on the relevant valuation dates ? (2) Whether, on the facts and in the circumstances of the case, the value of the assessee's interest in the corpus of the trusts executed by her maternal uncles, Shri Gautam Sarabhai and Dr. Vikram Sarabhai, could be any other figure except 'nil' ? (3) Whether, on the facts and in the circumstances of the case, the right of the assessee to receive income for her life under the trust deed executed by her grandmother, Smt. Saraladevi Sarabhai, amounted to an annuity within the meaning of Section 2(e)(iv) of the Wealth-tax Act, 1957, and exempt from payment of wealth-tax ?" P.N. Bhagwati, J. This reference arises out of assessment to wealth-tax made on the assessee for the assessment year 1959-60, the relevant valuation date being 31st March, 1959. The assessee is the daughter of one Bharatidevi Sarabhai. She is the beneficiary under two trust deeds, one dated 3rd November, 1956, made by Gautam Sarabhai, a maternal uncle of the assessee, and the other dated 24th April, 1957, made by Vikram Sarabhai, another maternal uncle of the assessee. The assessee is the daughter of one Bharatidevi Sarabhai. She is the beneficiary under two trust deeds, one dated 3rd November, 1956, made by Gautam Sarabhai, a maternal uncle of the assessee, and the other dated 24th April, 1957, made by Vikram Sarabhai, another maternal uncle of the assessee. Both the trust deeds are in identical terms barring only the difference in the name of the settlor and the period of distribution and it would, therefore be sufficient to make a reference only to the terms of one of the trust deeds, namely, that made by Gautam Sarabhai and whatever we say in regard to the terms of that trust deed it must apply equally in regard to the terms of the trust deed made by Vikram Sarabhai. By the trust deed Gautam Sarabhai settled certain shares and investments more particularly described in the schedule on the trusts set out in clause 2 of the trust deed. "2. (a) The trustees shall pay the net income of the trust funds to the said Anarkali, daughter of the settlor's sister, Bharatidevi Sarabhai, for a period of 18 years from the date of this deed (hereinafter referred to as " the said period ") provided however that during the minority of the said Anarkali the trustees shall be at liberty either to utilise the net income of the trust funds for her support, benefit, education and advancement in life of the said Anarkali or to pay the net income of the trust funds to Bharatidevi Sarabhai, mother of the said Anarkali as the guardian of the said Anarkali for the said purpose and the receipt of the said Bharatidevi Sarabhai as the guardian of the said Anarkali for the net income shall be a valid and effectual discharge to the trustees who shall not be liable to see to the application thereof. (b) From and after the expiration of the said period but not otherwise, the trustees shall hold the trust funds in trust for the said Anarkali absolutely. (b) From and after the expiration of the said period but not otherwise, the trustees shall hold the trust funds in trust for the said Anarkali absolutely. (c) If the said Anarkali shall die before the expiration of the said period leaving a child or children her surviving, the trustees shall hold the trust funds in trust for such child or children of the said Anarkali, if more than one in equal shares absolutely, provided however that if the said Anarkali shall die before the expiration of the said period without leaving a child or children her surviving the trustees shall hold the trust funds for her mother, Bharatidevi Sarabhai, absolutely and if the said Bharatidevi Sarabhai shall not be then living, then in trust for such of the other children or child of the said Bharatidevi Sarabhai as may be living at the death of the said Anarkali, and if more than one in equal shares absolutely. (d) Notwithstanding anything to the contrary herein contained, the trustees shall have absolute power and discretion at any time or times until the expiration of the said period to have recourse to and utilise from time to time any portion or portions of the corpus of the trust funds for the support, education, benefit and advancement in life of the said Anarkali or on the occasion of any serious illness or emergency as the trustees may in their absolute discretion consider proper and necessary and the decision of the trustees to utilise any portion or portions of the corpus of the trust funds under this clause for the benefit of the said Anarkali shall be final and binding on all persons and shall not be liable to be questioned or challenged by any person whatsoever." 18. The Wealth-tax Officer assessing the assessee to wealth-tax for the assessment year 1959-60 did not include her interest in the corpus of the trust funds in computing her total wealth assessable to wealth-tax. There were, however, certain other determinations made by the Wealth-tax Officer in the process of assessment with which the assessee was aggrieved and she, therefore, preferred an appeal to the Appellate Assistant Commissioner. There were, however, certain other determinations made by the Wealth-tax Officer in the process of assessment with which the assessee was aggrieved and she, therefore, preferred an appeal to the Appellate Assistant Commissioner. Before the Appellate Assistant Commissioner the Wealth-tax Officer submitted that while making the assessment he had forgotten to include in the net wealth of the assessee the value of her interest in the corpus of the trust funds and the assessment was, therefore, required to be enhanced. This argument was resisted by the assessee who contended that the interest in the corpus of the trust funds possessed by her was merely a spes successions-a mere chance or possibility of acquiring the corpus contingent on her surviving the period of distribution-and such an interest being inalienable, its value was nil. The Appellate Assistant Commissioner was impressed by this contention of the assessee and he, therefore, refused to add any amount to the net wealth of the assessee in respect of her interest in the corpus of the trust funds. The Wealth-tax Officer carried the matter in appeal to the Tribunal but the Tribunal also took the same view and held : "Only after the assessee attained a certain specified age under the former two trust deeds the assessee would acquire an interest in the corpus . . . The living of the assessee up to the period specified in the former two trust deeds and the exercise of discretion of the trustees to utilise the trust corpus for the benefit of the minor are both uncertain events . . . Under such circumstances we agree with the Appellate Assistant Commissioner that the interest in the corpus possessed by the assessee was only a spes successions. There was a mere possibility or chance of acquisition of such an interest on a future date on the happening of an event. Such an interest in the trust corpus on the relevant valuation date was neither transferable nor had any market value." and the Appellate Assistant Commissioner was, therefore, right in valuing it at nil. There was a mere possibility or chance of acquisition of such an interest on a future date on the happening of an event. Such an interest in the trust corpus on the relevant valuation date was neither transferable nor had any market value." and the Appellate Assistant Commissioner was, therefore, right in valuing it at nil. This led to a reference application by the Commissioner and on the application, the following two questions of law were referred for the opinion of this court : "(1) Whether, on the facts and in the circumstances of the case, and on a proper construction of the provisions of the trust deed dated November 3, 1956, executed by Shri Gautam Sarabhai and dated April 24, 1957, executed by Dr. Vikram A. Sarabhai, was the Tribunal right in holding that the assessee had no interest in the corpus of the said two trusts on the relevant valuation dates ? (2) Whether, on the facts and in the circumstances of the case, the value of the assessee's interest in the corpus of the trusts executed by her maternal uncles, Shri Gautam Sarabhai and Dr. Vikram Sarabhai, could be any other figure except 'nil' ? " 19. The reference also raises one more question and that arises out of a third trust deed made for the benefit of the assessee. That is a third trust deed dated 31st March, 1959, made by Sarladevi Sarabhai, the grandmother of the deceased. Sarladevi Sarabhai by this trust deed settled certain shares more particularly described in the schedule on the trusts set out in clauses (1) and (2) of the trust deed. That is a third trust deed dated 31st March, 1959, made by Sarladevi Sarabhai, the grandmother of the deceased. Sarladevi Sarabhai by this trust deed settled certain shares more particularly described in the schedule on the trusts set out in clauses (1) and (2) of the trust deed. Clause (1), which is the material clause for the purpose of the present reference, reads as follows : "(1) During the lifetime of the said Anarkali the trustees shall utilise the net income of the trust funds for the maintenance, support, education and benefit of the said Anarkali provided however that during the minority of the said Anarkali the trustees shall be at liberty either to utilise the net income of the trust funds for her maintenance, support, education and benefit of the said Anarkali or to pay the net income of the trust funds to Bharatidevi Sarabhai the mother or other guardian of the said Anarkali as the guardian of the said Anarkali for the said purpose and the receipt of the said Bharatidevi Sarabhai as the guardian or of other guardian of the said Anarkali for the net income shall be valid and effectual discharge to the trustees. " 20. The Wealth-tax Officer took the view that this clause conferred life interest in the corpus on the assessee and he accordingly valued such life interest and included it in the net wealth of the assessee. The assessee did not dispute that the valuation of the life interest was liable to be included in computing her net wealth but she was aggrieved by the manner in which the valuation was made and she, therefore, appealed against the valuation to the Appellate Assistant Commissioner. The Appellate Assistant Commissioner partly accepted the contention of the assessee in regard to the valuation and directed the Wealth-tax Officer to recompute the value of the life interest. The assessee and the Wealth-tax Officer were both dissatisfied with this order and hence both of them preferred appeals to the Tribunal. Before the Tribunal a new contention was advanced on behalf of the assessee, namely, that the interest which the assessee had under the trust deed constituted an "annuity" and was, therefore, exempt from wealth-tax under Section 2(e)(iv) of the Wealth-tax Act, 1957. Before the Tribunal a new contention was advanced on behalf of the assessee, namely, that the interest which the assessee had under the trust deed constituted an "annuity" and was, therefore, exempt from wealth-tax under Section 2(e)(iv) of the Wealth-tax Act, 1957. This contention found favour with the Tribunal and the Tribunal held that the interest of the assessee under the trust deed being an "annuity" exempt from wealth-tax, was not ineludible in the net wealth of the assessee. Hence the third question at the instance of the Commissioner which is in the following terms : "(3) Whether, on the facts and in the circumstances of the case, the right of the assessee to receive income for her life under the trust deed executed by her grandmother, Smt. Sarladevi Sarabhai, amounted to an annuity within the meaning of Section 2(e)(iv) of the Wealth-tax Act, 1957, and exempt from payment of wealth-tax ?" 21. We may first dispose of the third question which is covered by a recent decision of the Supreme Court in Commissioner of Wealth-tax v. Arundhati Balkrishna, (1970) 77 I.T.R. 505 (S.C.). The trust deed in that case also gave life interest in the corpus to Arundhati Balakrishna and the question was whether it constituted an "annuity" so as to be exempt from wealth-tax under Section 2(e)(iv). The Supreme Court pointed out that the payment to the assessee under the trust deed was not an "annuity" within the meaning of Section 2(e)(iv) ; the assessee had a life interest in the trust funds and, therefore, she was not entitled to exemption from payment of wealth-tax in relation to her interest. This decision is indistinguishable ; it directly applies in the present case and, consistently with it, we must answer the third question in favour of the revenue. 22. That takes us to the first two questions. Now it is no doubt true, as contended by the learned Advocate-General on behalf of the revenue, that the first question is restricted in its scope and ambit. 22. That takes us to the first two questions. Now it is no doubt true, as contended by the learned Advocate-General on behalf of the revenue, that the first question is restricted in its scope and ambit. It raises only a limited point whether the assessee had an interest in the corpus of the trust funds on the relevant valuation date or she had merely a spes successions and it might, therefore, seem at first sight that consideration of the nature and quality of the interest, if the assessee is found to have any, would be outside the scope of the reference. But we do not see how we can answer the question referred to us without pronouncing upon the nature and quality of the interest, if any, possessed by the assessee. The process of determining whether the assessee had any interest in the corpus would necessarily involve examination of the terms of the trust deeds and, incidentally, consideration of the nature and quality of the interest. Moreover, in order to answer the second question, it would be necessary not only to determine whether the assessee had any interest in the corpus on the relevant valuation date but also what sort of interest it was-whether it was vested or contingent. 23. Now one thing is clear that even if the construction placed by the Tribunal on the relevant provisions of the two trust deeds is right and the gift of the corpus to the assessee is to take effect "on a future date on the happening of an uncertain event", namely, the assessee being alive at the date of expiration of the period of distribution, namely, eighteen years under the first trust deed and seventeen years under the second trust deed, the assessee would undoubtedly have an interest in the corpus of the trust funds and it would not be a spes successions : vide Commissioner of Wealth-tax v. Ashokkumar Ramanlal, (1967) 63 I.T.R. 133 (Guj.) and Commissioner of Wealth-tax v. Bhogilal Maganlal Shah (1968) 69 I.T.R. 288 (Guj.). But the real question is : What is the nature and quality of the interest of the assessee in the corpus ? Is it a vested interest or a contingent interest ? The decision of this question depends on a true interpretation of the provisions of the trust deeds. But the real question is : What is the nature and quality of the interest of the assessee in the corpus ? Is it a vested interest or a contingent interest ? The decision of this question depends on a true interpretation of the provisions of the trust deeds. Now in cases of this kind where the question is whether an interest granted under a settlement or will is vested or contingent, there is one rule which has always to be borne in mind and the learned Advocate-General on behalf of the revenue strongly urged upon us not to ignore it. The rule is and it is a well-established rule for the guidance of the courts in construing a settlement or will, that the interest must ordinarily be held to be vested unless a condition precedent to the vesting is expressed with reasonable clearness : see Bickersteth v. Shanu, (1936) A.C. 290, which was a case relating to devise of real estate but the rule applies equally to disposition of what is known in the English law as personalty. But like all rules of construction this rule has only presumptive value and, as pointed out by the Supreme Court in Rajes Kanta Roy v. Smt. Santi Debi, (1957) S.C.R. 77 (S.C.), this "bias in favour of a vested interest "must give way where" the intention to the contrary is definite and clear". The question, therefore, ultimately is one of ascertaining the true intention of the author of the settlement. Has the author made his intention clear and definite by using appropriate language that the interest granted under the settlement should be a contingent interest : if not, it must ordinarily be held to be vested. And this intention must be gathered not from one part of the document or the other, but from a comprehensive view of all the terms of the document. And this intention must be gathered not from one part of the document or the other, but from a comprehensive view of all the terms of the document. It is well-settled that the intention of the author is to be collected from the settlement as a whole and no one clause should be considered in isolation : the intention is to be found not in one part of the settlement or in the other but in the entire settlement and that intention can best be gathered by viewing a particular part of the settlement not detached from its context in the settlement, but in connection with its whole context ; vide Commissioner of Wealth-tax v. Ashokkumar Ramanlal, (1967) 63 I.T.R. 133 (Guj.). 24. Bearing in mind this primary rule of construction, we may now turn to the provisions of the two trust deeds. The material provisions of both the trust deeds are identical and we would, therefore, for the sake of convenience, refer only to the material clause of the first trust deed. The provision of the first deed which effects gift of the corpus to the assessee is sub-clause (b) of clause 2. This provision says that from and after the expiration of the period of eighteen years from the date of the first deed (the period being seventeen years in the case of the other trust deed) but not otherwise, the trustees shall hold the trust funds in trust for the assessee absolutely. Now, on the plain terms of this provision, it is clear that the interest in the corpus of the trust funds is to vest in the assessee only at the date of expiration of the period of distribution and not before such date. The trustees are required to hold the corpus of the trust funds in trust absolutely for the assessee only from the expiration of the period of distribution and it is only then that the interest in the corpus of the trust funds would vest in the assessee. But if the assessee dies before the expiration of the period of distribution, what is to happen to the corpus of the trust funds ? To whom is it to go ? The answer is provided by clause 2, sub-clause (c). But if the assessee dies before the expiration of the period of distribution, what is to happen to the corpus of the trust funds ? To whom is it to go ? The answer is provided by clause 2, sub-clause (c). That sub-clause says that if the assessee shall die before the expiration of the period of distribution leaving a child or children her surviving, the trustees shall hold the trust funds in trust for such child or children of the assessee, if more than one in equal shares absolutely, but if she shall die before the expiration of the period of distribution without leaving a child or children her surviving, the trustees shall hold the trust funds for her mother, Bharatidevi Sarabhai, absolutely and if Bharatidevi Sarabhai is not then alive, then in trust for such of the other child or children of Bharatidevi Sarabhai as may be living at the death of the assessee, and if more than one, in equal shares absolutely. This provision also emphasizes that the interest in the corpus of the trust funds is not intended to vest in the assessee until the expiration of the period of distribution. If the assessee is alive at the date of expiration of the period of distribution, the interest in the corpus of the trust funds would vest in her : if she is not alive, but she has died leaving a child or children her surviving, the interest in the corpus of the trust funds would vest in such child or children at the death of the assessee : if she has died without leaving any child or children her surviving, the interest in the corpus of the trust funds would vest in Bharatidevi Sarabhai if she is then alive : but if she too is dead, the interest in the corpus of the trust funds would vest in the child or children of Bharatidevi Sarabhai who may be living at the death of the assessee. Throughout, the contingency of the beneficiary of the corpus being alive at the relevant date is emphasised in sub-clause (c) of clause 2 and that reinforces the view that under clause 2, sub-clause (b), the interest granted to the assessee is not a vested interest arising immediately to the assessee but is a contingent interest which becomes vested only if the assessee is alive at the date of expiration of the period of distribution. 25. But, contended the learned Advocate-General on behalf of the revenue, whatever might have been the position if clause 2, sub-clauses (b) and (c), stood alone, a vital difference was made by clause 2, sub-clause (a), which gave the net income of the trust funds to the assessee during the entire period up to the date of expiration of the period of distribution. The argument of the learned Advocate-General was that this provision brought the case within the exception to Section 21 of the Transfer of Property Act, which provides as follows : "21. Where, under a transfer of property, a person becomes entitled to an interest therein upon attaining a particular age, and the transferor also gives to him absolutely the income to arise from such interest before he reaches that age, or directs the income or so much thereof as may be necessary to be applied for his benefit, such interest is not contingent." 26. The learned Advocate-General contended, relying on the exception to Section 21, that the interest in the corpus of the trust funds coming to the assessee under clause 2, sub-clause (b), though apparently contingent on her being alive at the date of expiration of the period of distribution, was really vested since the settlor also gave to her absolutely the income to arise from such interest before the expiration of the period of distribution. Now, it is no doubt true, as contended by the learned Advocate-General, that the net income of the trust funds is given by the settlor to the assessee absolutely during the entire period up to the expiration of the period of distribution by sub-clause (a) and it might, therefore, appear at first sight that the case falls within the plain terms of the exception to Section 21 ; but even so, we do not think that the interest given to the assessee in the corpus under clause 2, sub-clause (b), can be regarded as a vested interest. The exception to Section 21 does not enact a rule of law which must prevail over the expressed intention of the settlor. It is merely a rule enacted by the legislature to serve as an aid to ascertain the intention of the settlor where the intention may be doubtful. It is nothing more than a rule of construction founded on the principle of the assumed intention of the settlor and it must yield where the intention of the settlor is manifest from the words used in the settlement. Like all rules of construction, the operation of this rule is presumptive and not peremptory and, therefore, where the words used by the settlor are clear and unambiguous, there can be no scope for invoking the rule. The language and the context of the provision to be construed must never be lost sight of ; to ignore the language and the context would be to make the intention of the settlor subordinate to the rule. Being merely an aid to ascertain the intention of the settlor and the ultimate object being really to ascertain such intention, the rule should not be regarded as one of compulsory application and if the intention of the settlor is otherwise clear and manifest, effect should be given to such intention despite the rule. 27. Being merely an aid to ascertain the intention of the settlor and the ultimate object being really to ascertain such intention, the rule should not be regarded as one of compulsory application and if the intention of the settlor is otherwise clear and manifest, effect should be given to such intention despite the rule. 27. Theobald points out in his well-known book on Wills, fourteenth edition, at page 469 : "Where there is an express direction as to the time of vesting, nothing can vest before the appointed time." and so also says Jarman in his classical work on Wills, eighth edition, volume 2, at page 1368 : "The rule of construction under consideration is also excluded by a declaration that the devisee shall take a vested interest at the future period, as such a declaration obviously carries with it an implied negation of an earlier period of vesting." 28. Of course, this observation is made by Jarman in regard to the rule in Edwards v. Hammond, (1684) 3 Lev. 132, but the rule enacted in the exception to Section 21 being as much a rule of construction as the rule in Edwards v. Hammond, (1684) 3 Lev. 132, this observation must equally apply here and if there is a declaration expressing clear and definite intention of the settlor that the assessee shall take a vested interest on the expiration of the period of distribution and not earlier, it would exclude the rule enacted in the exception to Section 21. 29. This position is also statutorily recognised by the legislature. Section 19 deals with vested interest. Both these sections are complementary to each other and they have to be read together. Now Section 19 points out when an interest created in favour of a person can be said to be "vested". It says : "Where, on a transfer of property, an interest therein is created in favour of a person without specifying the time when it is to take effect, or in terms specifying that it is to take effect forthwith or on the happening of an event which must happen, such interest is vested..........." 30. But this statement is in express terms made subject to a very important qualification denoted by the words " unless a contrary intention appears from the terms of the transfer ". But this statement is in express terms made subject to a very important qualification denoted by the words " unless a contrary intention appears from the terms of the transfer ". These qualifying words make it abundantly clear that the rule embodied in Section 19 is merely a rule of construction intended as an aid in ascertaining the true intention of the settlor and it must give way where the intention of the settlor is manifest from the language used by him. Even if the conditions specified in Section 19 are satisfied, the interest created on a transfer would not be vested if it appears clearly from the terms of the transfer that the interest was not intended to be vested. The intention of the settlor is the paramount consideration and that must prevail over any artificial rules of construction such as those set out in Section 19. It is no doubt true that the qualifying words which occur at the end of Section 19 are not to be found in Section 21, but that makes no difference because, as pointed out above, Section 21 is complementary to Section 19 and if a contrary intention appearing from the terms of the transfer is to prevail in determining whether an interest is vested or not for the purpose of Section 19, it must equally prevail in determining whether the interest is contingent or not for the purpose of Section 21. Moreover, the exception to Section 21, by necessary implication, suggests that, in the circumstances set out in the exception, the interest would be vested. Therefore, though placed as an exception to Section 21, it is projected into Section 19 and must be read as part of it and if the rule enacted in Section 19 is subject to a contrary intention appearing from the terms of the transfer, equally must the rule enacted in the exception to Section 21 be read subject to such contrary intention. 31. Turning once again to clause 2, sub-clause (b), of the trust deeds, it is clear from the language of that sub-clause that the interest in the corpus of the trust funds is given to the assessee only from the date of expiration of the period of distribution and it is only then, and not before, that such interest is intended to vest in the assessee. The settlor has expressed this intention in clear and unequivocal words which do not admit of any doubt or debate. It may be noticed that the settlor has not been content with merely providing that from and after the expiration of the period of distribution the trustees shall hold the trust funds in trust absolutely for the assessee but has added the words "but not otherwise". These words are emphatic words and they clearly indicate the intention of the settlor that the interest in the corpus of the trust funds is to vest in the assessee on the expiration of the period of distribution and not before. The words "from and after the expiration of the said period" standing by themselves might not have been sufficient to repel the applicability of the exception to Section 21 but the addition of the words "but not otherwise" make a vital difference. We must give effect to the words "but not otherwise". We cannot treat them as mere surplusage adding nothing to the words before them, namely, "from and after the expiration of the said period". The only way in which effect can be given to these words is by interpreting them as clearly conveying the intention of the settlor that the vesting of interest in the corpus of the trust funds in the assessee should not take place at any time prior to the expiration of the period of distribution. This paramount intention of the settlor must prevail over the rule of construction enacted in the exception to Section 21. We are, therefore, of the view that the interest of the assessee in the corpus of the trust funds is not a vested interest. It is contingent on the assessee being alive at the expiration of the period of distribution. It is, therefore, liable to be valued as a contingent interest and, on that basis, it must be held to have some value other than nil. 32. We, accordingly, answer question No. 1 in the negative, question No. 2 in the affirmative and question No. 3 in the negative. The assessee will pay the costs of the reference to the Commissioner.