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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