Bharucha, J.
1. This reference relates to the assessment years 1964-65 and 1965-66. The assessee had, by three indentures of trust dated March 26, 1959, settled certain shares of Mafatlal Gagalbhai & Co. (Pvt.) Ltd. upon trust and transferred them in favour of the trustees there-under appointed. The trusts were created for the benefit of the assessee's minor daughters, Kunti, Aparna and Gayatri. By the two indentures of trust dated March 29, 1961, the assessee transferred certain other shares of the same company in favour of the trustees thereunder appointed for the benefit of his minor daughters, Aparna and Gayatri. In computing the net wealth of the assessee as on March 31, 1964, and March 31, 1965, relevant to the assessment years 1964 and 1965-66, the Wealth-tax Officer included the market value of the aforementioned shares in the net wealth of the assessee, invoking the provisions of section 4(1)(a)(iii) of the Wealth-tax Act, 1957. The Appellate Assistant Commissioner, on appeal, upheld the Income-tax Officer's order in so far as it concerned the two trusts dated March 29, 1961, but upset it in regard to the three trusts dated March 26, 1959. The Tribunal, in the cross-appeals filed by the assessee and the Revenue, upheld the Appellate Assistant Commissioner's order.
2. We are now called upon to answer the following question raised at the instance of the Revenue :
'Whether, on the facts and in the circumstances of the case, the Tribunal was right in excluding the value of the shares settled by the assessee on Kunti Family Trust, Miss Aparna Family Trust No. 1 and Miss Gayatri Family Trust No. 1, which was included under section 4(1)(a)(iii) of the Wealth-tax Act, 1957, in the net wealth of the assessee ?'
3. We are also called upon to answer the following question raised at the instance of the assessee :
'Whether, on the facts and in the circumstances of the case the value of 50 shares of Mafatlal Gagalbhai & Co. Pvt. Ltd. transferred by the assessee to Miss Aparna Family Trust No. 2 and Miss Gayatri Family Trust No. 2 under the Indentures of Trust dated March 29, 1961, or any part thereof, is includible in the net wealth of the assessee as on the valuation dates relevant to the assessment years 1964-65 and 1965-66 under section 4(1)(a)(iii) of the Wealth-tax Act, 1957 ?'
4. It is necessary to note the relevant provisions of the Wealth-tax Act, 1957. Section 3 is the charging section. It brings to tax the net wealth of every individual, Hindu undivided family and company on the corresponding valuation date. The valuation date is ordinarily the last day of the previous year (section 2(q)). The relevant provisions of section 4 read thus :
'4. (1) In computing the net wealth of an individual, there shall be included, as belonging to him -
(a) the value of assets which on the valuation date are held...
(iii) by a person or association of persons to whom such assets have been transferred by the individual otherwise than for adequate consideration for the benefit of the individual or his wife or minor child, or....'
(to the provisions of section 4, there was an amendment for the second of the two assessment years with which we are here concerned, but it had no bearing upon the present controversy).
5. Section 21 provided that :
'21. In the case of assets chargeable to tax under this Act which are held by... any trustee appointed under a trust declared by a duly executed instrument in writing... the wealth-tax shall be levied upon and recoverable from... the trustee,... in the like manner and to the same extent as it would be leviable upon and recoverable from the person on whose behalf the assets are held, and the provisions of this Act shall apply accordingly.'
(Even to the provisions of section 21, there was an amendment for the second of the two assessment years with which we are here concerned, but it has no bearing upon the present controversy).
6. Mr. Kolah, learned counsel for the assessee, submitted that there being duly executed instruments of trusts, the assets sought to be taxed could be assessed only in the hands of the trustees by virtue of section 21 and the provisions of section 4(1)(a)(iii) did not, therefore, apply Mr. Kolah founded his argument upon the judgment of the Supreme Court in CWT v. Trustees of H. E. H. Nizam's Family (Remainder Wealth) Trust : [1977]108ITR555(SC) . The Supreme Court there held that whenever a trustee was sought to be assessed, the assessment had to be made in accordance with the provisions of section 21. It noted the consequences that flowed from the proposition laid down in section 21 that the trustee was assessable in the like manner and to the same extent as the beneficiary and held that the assessment could be made only in respect of the beneficial interests of the beneficiaries in the trust funds. The Supreme Court, it will be noted, did not consider the provisions of section 4(1)(a)(iii).
7. Mr. Jetly, learned counsel for the Revenue, referred us to the three judgments of this court, namely, CWT v. Kishanlal Bubna : [1976]103ITR56(Bom) , Shardaben Jayantilal Mulji v. CWT : [1977]106ITR667(Bom) and K. M. Sheth v. CIT/CWT : [1977]107ITR45(Bom) . While these judgments considered the provisions of section 4(1)(a)(iii), they did not consider the provisions of section 21.
8. We must, therefore, consider the impact of sections 4 and 21, one upon the other, independently. The provisions of section 21 are to be applied when an assessment has to be made in the hands of the trustees. This is clear from the provisions of section 21 and it has been so held by the Supreme Court in the aforementioned case. Section 4, on the other hand, requires the inclusion of the assets of a trust as therein mentioned in the computation of the net wealth of the settlor. Such inclusion is required to be made of the value of the assets which have been transferred by that individual to a person or association of persons otherwise than for adequate consideration for the benefit of, inter alia, a minor child. The stage for assessing the trustees in respect of such assets is, therefore, not reached and the provisions of section 21 are not applicable. The same conclusion may also be reached by applying the principle that the specific excludes the general provision. Thus, when trustees have to be assessed to wealth-tax, the provisions of section 21 exclude the other general provisions of the Act in this regard, but when the trust satisfies the requirements of section 4(1)(a)(iii), it is that provision that has to be applied.
9. In the instant case, the assessee transferred the assets we are here concerned with to the trustees otherwise than for adequate consideration and for the benefit of his minor children. The value of the assets has, therefore, by reason of section 4(1)(a)(iii), to be included in the assessee's net wealth. Accordingly, the question raised on behalf of the Revenue must be answered in the affirmative and in favour of the Revenue. The question raised by the assessee has, for the same reasons, to be answered in the affirmative and in favour of the Revenue.
10. The reference also raises two further questions at the instance of the assessee. They read thus :
'(i) Whether, on the facts and in the circumstances of the case, the Tribunal erred in law in holding that the assessee was not entitled to exemption under section 5(1)(viii) of the Wealth-tax Act, 1957, in respect of jewellery and ornaments of the value of Rs. 2,41,466 held by him for his personal and/or household use and of the value of Rs. 1,14,500 being jewellery and ornaments gifted by him to his wife for her personal use ?
(ii) Whether section 5(1)(viii) of the Wealth-tax Act, 1957, as retrospectively amended, applied to the case of the assessee in so far as the claim for exemption of jewellery and ornaments of the aggregate value of Rs. 3,55,966 was concerned ?'
11. We find that the first question arises not out of the order of the Tribunal but out of the order of the Appellate Assistant Commissioner. The Tribunal decided the issue on the basis which is indicated in the second question, namely, the retrospective amendment of section 5(1)(viii) of the Wealth-tax Act, 1957. We, therefore, decline to answer the first question. The second question has to be answered, it is agreed, in the affirmative and in favour of the Revenue, having regard to the judgment of this court in CWT v. Rasesh N. Mafatlal : [1980]126ITR173(Bom) . In giving effect to this answer, the Tribunal shall, we trust, bear in mind our judgment in Wealth-tax Reference No. 13 of 1975, delivered on March 31, 1987 - CWT v. Godavaribai R. Podar, : [1988]169ITR245(Bom) .
12. There shall be no order as to costs.