Judgment ( 1. ) THIS decision rendered in this reference shall also govern disposal of other connected references being WT Ref. No. 64 of 1999 and IT Ref. No. 53 of 1997 as all these references involve common questions of law. ( 2. ) THIS is a wealth-tax reference made by the Tribunal (ITAT) under Section 27 (1) of the WT Act to this Court in RA No. 60/ind/1997 which in turn arises out of an order of Tribunal dt. 15th April, 1997, passed in WTA Nos. 78, 79 and 80/ind/1991 as also 12, 13 and 14/ind/1992 (asst. yrs. 1984-85 to 1986-87) and (1987-88 to 1989-90) for answering following questions of law : " (i) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in law in holding that the beneficial interest held by the assessee in two trusts was only a limited interest in spite of the judgment of the Supreme Court in the assessees own case holding that the beneficial interest was held by him as individual and the assessee was not competent to throw his beneficial interest to common hotchpotch of HUF by executing an unequivocal declaration on 19th Oct. , 1964 ? (ii) Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in construing Clause 4 of the trust deed limiting the beneficial interest of the beneficiary so as to debar him from disposing of his beneficial interest during his life-time ?" ( 3. ) IN order to answer the questions referred supra, it is necessary to take note of facts stated in statements of case and decided cases arising out of this very controversy. ( 4. ) THE assessee is an individual. For the asst. yrs. 1984-85 to 1989-90, he filed his WT returns, in which he declared his net wealth as follows : Asst. yr. Date of filing the return Net wealth declared 1984-85 30-9-1985 6,11,298 1985-86 31-12-1985 4,32,180 1986-87 31-3-1987 7,76,382 1987-88 30-7-1987 10,49,948 1988-89 29-7-1988 96,965 1989-90 4-10-1989 (-) 17,488 ( 5. ) IT is in the course of these assessment proceedings, the assessee by his letter dt. 5th Jan. , 1989, disclosed that he has made an unequivocal declaration as back as on 19th Oct. ) IT is in the course of these assessment proceedings, the assessee by his letter dt. 5th Jan. , 1989, disclosed that he has made an unequivocal declaration as back as on 19th Oct. , 1964, by which he has thrown his l/6th interest in 2 trusts (Shreemant Danvir Sir Hukumchand Trust) and (Smt. Shoubhagya Danshilas Lady Kanchanbai Trust) in common hotchpotch of his own HUF w. e. f. 31st Oct. , 1959. In support of this statement, assessee also filed a copy of declaration. It is on the basis of this statement or/and declaration, the assessee contended before the AO that this l/6th interest in the corpus of the above-mentioned two trusts now belongs to his HUF and no longer remains his individual assets. It is essentially this issue which was gone into and was the core of the controversy in these proceedings. ( 6. ) THE AO did not accept the contention of assessee and held the l/6th share to be that of assessee in his individual capacity by his order (Annex. A ). The assessee carried the matter in appeal before CWT (A) but even the first appellate authority did not accept the stand of assessee and upheld the order of AO by dismissing the appeal (Annex. B ). The assessee then pursued the matter to Tribunal (ITAT) in second appeal, but even the Tribunal dismissed the appeal and upheld the order of the AO and CWT (A) though on slightly different reasoning by their order (Annex. C ). It is against these orders, the assessee prayed to the Tribunal for making a reference to this Court. As observed supra, the Tribunal did accept the prayer made by the assessee and made reference to this Court on the questions referred above. This is how these two questions have been referred to this Court on a reference made by the Tribunal by taking recourse to the provisions of Section 27 (1) of the Act. ( 7. ) IT may be relevant here to take note of the background of the case which has a material bearing over the question referred. Indeed, one can safely conclude that this litigation is an offshoot of the earlier litigation which travelled upto the Supreme Court at the instance of this assessees. ( 8. ) THE assessee is a grandson of Sir Hukumchand Seth, who was the head of family. Indeed, one can safely conclude that this litigation is an offshoot of the earlier litigation which travelled upto the Supreme Court at the instance of this assessees. ( 8. ) THE assessee is a grandson of Sir Hukumchand Seth, who was the head of family. The family carried on various businesses and owned extensive properties. Prior to 31st March, 1950, Sir Hukumchand and the members of his family constituted an HUF. By a deed of partition dt. 31st March, 1950, various family properties were partitioned between Sir Hukumchand, his wife, lady Kanchanbai executed two trust deeds on the same date 21st March, 1952, purporting to constitute trust of the properties respectively belonging to them. The trust deeds contained identical terms and conditions. The trustees in each case were Sir Hukumchand, lady Kanchanbai, their son, Raj Kumar Singh and his wife, Prem Kumari Devi and the eldest grandson, Raja Bahadur Singh. The beneficiaries named in the trust deeds were Rajkumar Singh and his sons, Raja Bahadur Singh, Maharaja Bahadur Singh, Jambukumar Singh, Chandra Kumar Singh and Yesh Kumar Singh. With the passage of time and in accordance with the terms and conditions of the trust deeds, the beneficiaries came into possession of their respective shares of the properties. Originally, the income from those properties was returned by them for the purpose of their income-tax assessments in their individual status, but subsequently they began to assert that the properties were received by them as the Kartas of their respective HUFs and that, therefore, the income was liable to be assessed in that status. ( 9. ) IT is in assessment cases of three grandsons of late Hukumchand (1961-62 and 1962-63), the question arose as to whether it was intended by the settlor that the beneficiaries of the trust should receive the properties in their individual capacity or in a representative capacity as Kartas of their respective HUFs. ( 10. ) THE taxing authorities, i. e. , AO, CIT (A) and Tribunal held in favour of Revenue and against the assessee. It was held that the assessee has received the properties as beneficiaries in his individual capacity and not in his capacity as Karta of his HUF. ( 10. ) THE taxing authorities, i. e. , AO, CIT (A) and Tribunal held in favour of Revenue and against the assessee. It was held that the assessee has received the properties as beneficiaries in his individual capacity and not in his capacity as Karta of his HUF. The Tribunal then referred the following question of law for answer by this Court on merits : "whether, on the facts and in the circumstances of the case, the Tribunal was justified in law in holding that the income derived by the beneficiaries under the two trust deeds belonged to the beneficiary in individual capacity and not in the capacity as representing the HUF ?" ( 11. ) HOWEVER, the High Court understood the two trust deeds differently from the taxing authorities and held that the properties had been settled with the assessees in their representative capacity as Kartas of their respective HUFs. It is against this view of the High Court, Revenue went to Supreme Court. Their Lordships examined the issue in great detail in the context of relevant clauses of two trust deeds and answered the question in favour of Revenue and against the assessee. In other words, their Lordships held that on a proper construction of the relevant clauses of the trust deeds in question, the properties, i. e. , l/6th share in the trust was held by the assessee in his individual capacity and not in his capacity as Karta of his HUF. Since the reasoning that led their Lordships for coming to such conclusion is very material for the disposal of their case, we consider it proper to quote the same in extenso infra for reference : "the sole question before us is whether upon those terms and conditions, it was intended by the settlors that the beneficiaries should receive the properties in their individual capacity or in a representative capacity as Kartas of their respective HUFs. It is not necessary to refer to all the provisions of the trust deeds because; the parties are in common agreement, that the principal provisions calling for consideration are Clauses 1, 3 and 4 of the trust deeds. It is not necessary to refer to all the provisions of the trust deeds because; the parties are in common agreement, that the principal provisions calling for consideration are Clauses 1, 3 and 4 of the trust deeds. Clause 1 empowers the trustees to apply the income from the trust properties to the rent, rates, taxes and other liabilities in respect of the trust properties, including the cost of maintenance and thereafter to divide the balance left over in equal shares among the beneficiaries, so that each beneficiary received one-sixth of the balance. In the event of a beneficiary being a minor, his share of income was payable to his natural guardian for being applied towards his education, maintenance and advancement in life, marriage and other expenses. It was also provided that in the event of a beneficiary dying before the time of distribution of the properties between the beneficiaries under Clause 4, the share of the beneficiary so dying would be used to support and maintain his widow and his male issue "in such manner as the trustees shall in their absolute and uncontrolled discretion deem proper" and the surplus, if any, of the share of that beneficiary and the income therefrom would be accumulated and kept in credit to his account and preserved in order to be distributed in accordance with Clause 4. In the event of a beneficiary dying before the time of distribution without leaving any widow or male issue, his share was to be divided equally among other beneficiaries, then alive or the then widow and male issue of any other deceased beneficiary, if any, entitled to share in the distribution, subject, however, to provision being made for the maintenance and education until marriage and the marriage expenses of the daughter or daughters, if any, of the said beneficiary. Clause 3 declares that if any moneys were required for meeting extraordinary expenses of, or for the benefit of, any beneficiary or his wife or children on special occasions, such as the marriage of the beneficiary and of his children, the illness of the beneficiary or of his children, travelling expenses of the beneficiary and of his family for going abroad, their education in a foreign country or on such other occasions as the trustees may deem fit for special treatment, the trustees were empowered to pay to the beneficiary such amounts from time to time as they thought fit in their absolute discretion. Such amounts could be paid to the beneficiary out of the trust properties either by way of advance or loan either on interest or out of his share of the corpus. In the latter event, the share of the net income payable to the beneficiary was liable to proportionate reduction. Clause 4 provides that upon the youngest of the beneficiaries attaining the age of 30 years, the trustees would divide and distribute the trust properties together with the accumulated interest and income thereon among the beneficiaries, according to their respective rights and shares, that is to say equally, and in making such division, the trustees would take into consideration the amount due by the beneficiary to the trustees by way of loan or advance made to him. It was further provided that if any beneficiary should have died before the time of such division or distribution leaving a widow and any son or sons or only son or sons, the widow and/or the sons would take by substitution the share which the beneficiary would have taken had he been alive, and such share would be divided equally between the widow and the sons. The proviso declares that if at the time of the division and distribution, any beneficiary should have died without leaving any son but leaving only a widow, the widow would get half of the share of that beneficiary while the other half would be distributed among the remaining beneficiaries and the heirs of the beneficiaries entitled to distribution. The proviso declares that if at the time of the division and distribution, any beneficiary should have died without leaving any son but leaving only a widow, the widow would get half of the share of that beneficiary while the other half would be distributed among the remaining beneficiaries and the heirs of the beneficiaries entitled to distribution. A further provision declares that if at the time of division and distribution, any beneficiary should have died without leaving a widow or a son, his share would, subject to such adequate provision made for the maintenance and education until marriage and the marriage expenses of the daughter or daughters of such beneficiary as the trustees may in their discretion think fit, be distributed among the remaining beneficiaries and the heirs of the beneficiaries entitled to distribution. The assessees filed a declaration dt. 19th Oct. , 1964, that, on and from Diwali 1959, the income accruing to them as beneficiaries from the two trust deeds should be regarded as income belonging to their HUFs. The High Court and the Tribunal have rightly held that those subsequent declarations can be of no moment for deciding whether the income belonged to the individuals or their HUFs. It is settled law that the question has to be resolved upon the contents of the trust deeds, their terms and conditions being free from ambiguity. The question whether a gift of self-acquired or separate property by a father to his son results in the son holding it as ancestral property was considered by this Court in C. N. Arunachala Mudaliar v. C. A. Muruganatha Mudaliar (1954) 5 SCR 243 : AIR 1953 SC 495 , and it was laid down that it was perfectly competent for the father, when he makes a gift, to provide expressly either that the donee would take it exclusively for himself or that the gift would be for the benefit of the branch of his family, and if there are express provisions to that effect in the deed of gift or will, the interest which the son would take in such property would depend upon the terms of the grant. Where the document contains no clear words describing the kind of interest which the donee is to take, the question is one of construction and the Court must collect the intention of the donor from the language of the document taken along with the surrounding circumstances. There is no presumption one way or the other. It is not necessary for us to refer to the several cases cited before us, because each case must be decided on its own facts and each document calls for its own particular construction. The circumstances surrounding the execution of the two documents indicate that a common intention inspired the minds of the two settlors. This has considerable significance when it is realised that while one trust deed was executed by a male member of the family, the other was executed by a family member of the family. The course of devolution under the Hindu law would be materially different in the two cases and, therefore, the principles of the Hindu law governing the devolution of property, in the case of property passing from a father to his son and grandsons, cannot be invoked in these appeals. Even if the matter be looked at in the context of the Hindu law as it obtained at the relevant time, the terms and conditions of the trust deeds are wholly inconsistent with the property passing into the hands of the beneficiaries as Kartas of their respective HUFs. There is clear indication in the trust deeds which bears this out. In the first place, had it been intended that the beneficiary should receive the property as Karta of his HUF, the document would not have empowered the trustees, in Clause 1, to exercise ah absolute and uncontrolled discretion on the death of a beneficiary to apply his share to the maintenance of his widow and his male issue and to accumulate the surplus to the account of the said beneficiary for distribution. On the contrary, the trustees would have been under an obligation to entrust the income falling to the share of the deceased beneficiary to the members of his HUF and no discretion would have been permissible in regard to the disposal or otherwise of any part thereof. On the contrary, the trustees would have been under an obligation to entrust the income falling to the share of the deceased beneficiary to the members of his HUF and no discretion would have been permissible in regard to the disposal or otherwise of any part thereof. Secondly, the document would not have provided that if before the time of division and distribution, a beneficiary died leaving only a widow, the widow would get a half of the share belonging to the deceased beneficiary while the other half would be liable to distribution among the remaining beneficiaries and the heirs of other deceased beneficiaries. These two conditions are sufficient in themselves to lead to the conclusion that it was never intended that the properties should pass to the beneficiaries to be held by them for their respective HUFs. On the plain term of the trust deeds, the properties were intended to devolve on the beneficiaries in their individual capacity. It is contended by learned counsel for the assessees that the settlors intended under the two trust deeds to protect the grandsons and, the scheme incorporated in the trust deeds must be regarded as akin to a family settlement. We are unable to agree. The interest of the grandsons has been sufficiently protected by the terms and conditions of the trust deeds, and in order to safeguard that interest, it is not necessary to conclude that the properties were intended to go to the beneficiaries as Kartas of the HUFs. The grandsons themselves were beneficiaries and on the division and distribution* of the properties, they would have full power to deal with them according to their will and discretion. It is only where a beneficiary dies before the division and distribution of the properties without leaving a widow or sons that the trustees are empowered to intervene and direct, subject to providing for the maintenance, education and marriage of the deceased beneficiarys daughters, that the share of such beneficiary be divided among the remaining beneficiaries and the heirs of the deceased beneficiaries. We are of the opinion that the High Court has erred in the view taken by it of the two trust deeds and that the Tribunal was right in its conclusions. Accordingly, we answer the question referred to the High Court in each case in the affirmative, in favour of the Revenue and against the assessees. We are of the opinion that the High Court has erred in the view taken by it of the two trust deeds and that the Tribunal was right in its conclusions. Accordingly, we answer the question referred to the High Court in each case in the affirmative, in favour of the Revenue and against the assessees. The appeals are allowed with costs. " ( 12. ) IT is after this decision rendered by Supreme Court which is reported in CIT v. Maharaja Bahadur Singh and Ors. (1986) 162 ITR 343 (SC), the present controversy was raised by the assessee in subsequent assessment years contending that he being a beneficiary holding the l/6th share in his individual capacity as held by their Lordships of Supreme Court, has a right to throw the same in common hotchpotch. It is pursuant to this right the assessee asserted that he has thrown his l/6th individual share in his HUF by executing a declaration dt. 19th Oct. , 1964, referred supra and hence the same cannot be included in his individual net wealth. This is how this issue again came up before the taxing authorities in this litigation as to whether the stand of assessee is legally sustainable or not ? As noted supra, all the taxing authorities have negatived the stand of the assessee and now it is before this Court in this reference at the instance of assessee. ( 13. ) HEARD Shri P. M. Choudhary, learned counsel for applicant, and Shri R. L. Jain, learned senior advocate with Ms. Veena Mandlik, learned counsel for respondent. ( 14. ) SUBMISSION of learned counsel for assessee was firstly the issue involved in this case is not or/and cannot be held concluded or/and decided by the decision rendered by the Supreme Court in the earlier litigation in (1986) 162 ITR 343 (SC) (supra ). According to learned counsel, the question involved in earlier litigation and which eventually decided, though against the assessee by the Supreme Court, was about the status of assessee in holding l/6th share of the trust-individual or Karta. Secondly, once this issue was answered against the assessee, he had every right to transfer his undivided l/6th share in any manner recognised under the law as beneficiary of the trust property. Thirdly, the assessee having expressed his unequivocal intention to transfer his l/6th share by executing a declaration on 19th Oct. Secondly, once this issue was answered against the assessee, he had every right to transfer his undivided l/6th share in any manner recognised under the law as beneficiary of the trust property. Thirdly, the assessee having expressed his unequivocal intention to transfer his l/6th share by executing a declaration on 19th Oct. , 1964, throwing the same in common hotchpotch with that of his HUF, the same is legally permissible under Section 58 of the Indian Trust Act. Learned counsel lastly placing reliance on the decision of Bombay High Court reported in CIT v. Gopaldas T. Agarwal (1979) 116 ITR 613 (Bom) contended that issue in question be decided in favour of assessee. In reply, learned counsel for the Revenue supported the view taken by the Tribunal and prayed for answering the questions in favour of Revenue and against the assessee. ( 15. ) HAVING heard the learned counsel for the parties and having perused the statement of case, we are inclined to answer the questions against the assessee and in favour of Revenue. ( 16. ) AT the outset, we may observe that, while answering this reference, we cannot ignore the law laid down by the Supreme Court in this very case, i. e. , (1986) 162 ITR 343 (SC) (supra ). Secondly, we have to take into consideration, the finding returned by their Lordships as also its extent of application on the questions referred to this Court. In other words, even though, the questions referred to this Court in this reference may not be held as fully answered one way or other by the decision of Supreme Court in the case of Maharaja Bahadur Singh (supra), yet the interpretation placed by the Supreme Court in regard to the trust deeds in question as also of declaration dt. 19th Oct. , 1964, have to be given effect to and are in fact binding on this Court while answering the questions referred in this reference. ( 17. ) IN our considered view, while answering the questions, the intention of the settlors in managing the trust properties as also the restrictions placed on the powers of trustees as also beneficiaries in dealing with the trust properties have a material bearing. Their Lordships of Supreme Court have in clear terms held that the rights of the beneficiaries are not absolute in dealing with the trust properties. Their Lordships of Supreme Court have in clear terms held that the rights of the beneficiaries are not absolute in dealing with the trust properties. The relevant clauses of the trust deed (1, 3 and 4) extensively discussed in aforementioned paragraphs by their Lordships clearly show that the settlors have provided the manner of its utilisation by the beneficiaries in the event of particular happening or contingencies specified in the clauses in the trust deed. This clearly indicates that settlors did not intend to confer power upon the beneficiaries to completely divest themselves of their interest in l/6th share by blending it in their respective HUFs. Indeed, what the assessee failed to achieve in the earlier litigation, he could not be allowed to achieve in this manner to get over the view taken by Supreme Court, in the earlier case. In other words, it was a clear case where, assessee failed in his attempt in the earlier litigation to seek a declaration in his favour in regard to his status and hence, he cannot subsequently, by taking recourse to the declaration on 19th Oct. , 1964, be allowed to change the nature of property held by him in his capacity as beneficiary of the trust property. ( 18. ) IN any event, on plain language of clauses of the trust deeds (1,3 and 4), the intention of the settlors seems to be not to destroy the corpus of the trust nor to confer upon the beneficiary a right to dispose of or/and transfer his interest in the trust property in favour of any third party, thereby completely changing the very complexion and object of the trust created by them. It being a settled view of the Supreme Court laid down in this very case (supra) that the rights/obligation/duties of trustees/beneficiaries have to be decided keeping in view the intention of the settlors, object of the trust and terms/conditions of the trust deed, the same has to be kept in mind while deciding the rights of the beneficiaries. ( 19. ) TRUE it is that Section 58 of the Indian Trust Act recognises the power of any beneficiary to transfer his interest in the trust property but the section itself imposes restriction upon exercise of such powers. ( 19. ) TRUE it is that Section 58 of the Indian Trust Act recognises the power of any beneficiary to transfer his interest in the trust property but the section itself imposes restriction upon exercise of such powers. The use of the expression in Section 58 "but subject to the law for the time being in force as to circumstances and extent in and to which he may dispose of such interest" indicates that power of transfer is not absolute nor it can be exercised by any beneficiary of his own sweet will de hois the trust deed. This power is always recognised as being subject to such restrictions which are recognised under the law which includes the Trust Act as well. ( 20. ) AS taken note of supra, the intention of the settlors was not to allow the beneficiary of the trust property to transfer their interest but utilise the usufructs of the property in a particular way as also for the exclusive benefit of specified class of persons belonging to their family. This restriction, in our opinion, is sufficient to hold that beneficiary had no power to divest his l/6th interest in favour of his own HUF or to any other person. ( 21. ) WE are also of the view that this issue having been dealt with by the Supreme Court in the earlier litigation, the assessee cannot now be allowed to agitate indirectly on the strength of declaration dt. 19th Oct. , 1964. It is clear from the question posed by the Supreme Court which reads as under: "the sole question before us is whether, those terms and conditions, it was intended by the settlors that the beneficiaries should receive the properties in their individual capacity or in a representative capacity as Kartas of their respective HUFs ?" ( 22. ) AS observed supra, this question was answered against the assessee. It may be noted that assessee had also placed reliance on the declaration dt. 19th Oct. , 1964, in the earlier litigation, but their Lordships did not attach any importance to the same. ) AS observed supra, this question was answered against the assessee. It may be noted that assessee had also placed reliance on the declaration dt. 19th Oct. , 1964, in the earlier litigation, but their Lordships did not attach any importance to the same. In the light of their Lordships finding that intention of the settlors was not to allow beneficiary to hold the property for the benefit of his own HUF as Karta, we cannot now hold in this second round of litigation that beneficiary could transfer that very interest in favour of his HUF at a later stage by executing a declaration. In other words, when the Supreme Court held that settlor did not intend to transfer the interest in favour of HUF, then it logically follows that even a right of beneficiary to transfer his interest in favour of HUF by executing declaration was not recognised. In fact, conceding such right in favour of beneficiary would mean nullifying the effect of the decision of Supreme Court to a large extent, as also destroying the object of the trust conceived by the settlors at the time of its creation. ( 23. ) LEARNED counsel for the assessee placed reliance on the decision reported in CIT v. Gopaldas (supra ). In our view, it is distinguishable on facts. In that case, the issue was not decided on the strength of clauses in trust deed as was done in this case. ( 24. ) IN view of the aforesaid discussion, we answer the questions referred to this Court in favour of Revenue and against the assessee. No costs.