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6. As against this, learned standing counsel Shri B.B. Naik and Shri M.H. Joshi contended that the Tribunals order does not call for any interference in view of the fact that by virtue of provisions of section 3 of the Trust Act, the trustee became the legal owner of the assets in question as there was transfer of those assets from the settlor to the trustees. It was further submitted that the right of beneficiary under the trust is distinct from ownership and this was apparent from the fact that there was difference between legal owner and beneficial owner. That a beneficiary under the trust was only entitled to the beneficial interest and such beneficial interest could be exercised against a trustee as owner of the trust property. Furthermore, it was contended that even in a case like the present one, where the settlor is also sole beneficiary, the settlor would have no right in the legal ownership of the property. That provision of section 3 of the Act fasten charge of gift and the definition of the term gift was distinct from the one given in section 122 of the Transfer of Property Act, 1882. That though under the Transfer of Property Act acceptance was necessary the definition of gift under section 2(xii) of the Act did not require that there should be specific acceptance by a donee. Further contention was raised to the effect that the trust was an obligation annexed to the ownership and even though the trustee may have no beneficial interest in the trust property, it could be treated as onerous gift which was known to be valid in law. It was further submitted that once a transaction was shown to come within four corners of definition of gift there was no equity, no intendment as regards the purpose and the concepts of ownership or belonging to were not necessary for the purpose of the Act. The learned counsel also referred to and relied upon various decisions of the Apex Court and the Privy Council and various High Courts including this court.

4. The trustees shall at any time before the date of distribution be entitled to accelerate the date of distribution of the trust fund or any part thereof and in the event of the trustees deciding to do so, the trusts referred to in sub-clause (b) as the case may be shall forthwith cease and the trusts contained in sub-clause (c), (d) or (e) as the case may be shall become operative to the extent of the trust fund or any part thereof to which the decision of the trustees applies".

8. On consideration of the various definitions of the Act, it is clear that a gift for the purpose of the Act means transfer of any property made voluntarily and without consideration by one person to another. The definition of transfer of property takes within its sweep the creation of a trust in property. The donor is a person who makes gift and the donee is a person who acquires any property under a gift and includes both the trustee and the beneficiary where a gift is made to a trustee for the benefit of another person. The definition of donee specifically states that where a gift is made to a trustee for the benefit of another person includes both the trustee and the beneficiary, meaning thereby that the trustee does not receive the property for his absolute use but receives the same for the benefit of another person and such another person when read in context of a trust and as distinguished from the trustee shall have to be the beneficiary. Therefore, it appears that where the donor is the settlor of a trust and beneficiary is the sole beneficiary under deed of trust, the donee would be both the trustee and such beneficiary, and the trustee would hold the gifted property for the benefit of such beneficiary. The Act provides an inherent indication in this regard when one considers sections like 21A and 29 which fasten liability to tax on donee in certain situations. However, this position will also have to be examined in light of the definition clause under the Trust Act.

10. The question, therefore, that would arise is, can there be a trust where the settlor or creator of the trust and the sole beneficiary under the trust are one and the same person but the trustee or the trustees are distinct from such settlor or the beneficiary. This is the situation in the present case. If the answer in yes, what is the obligation that the trustee is required to discharge or what is the obligation which such a trustee is fastened with. Under the Trust Act the obligation is attached with the property and such obligation is for the purpose of administration and management of the property in question for the benefit of another, viz., beneficiary. The performance of such an obligation necessarily implies that the trustee has some control over the property which is the subject of the trust, or otherwise the trustee would be unable to deal with said property for the benefit of the beneficiary. To put it in other words the ownership of a trust is a matter of form rather than of substance. The property may belong to the beneficiary, but for obligation and use of it, the property vests in trust. The trustee is under an obligation to use the ownership rights for the benefit of those to whom the ownership rights for the benefit of those to whom the ownership rights really belong, i.e., beneficiary.

Applying the aforesaid ratio, though the trustees stand possessed of the trust property, the same is only for its administration and the beneficial ownership of the settlor remains with her as the sole beneficiary. Thus, there is no liability to gift-tax.

15. To summarise, though there is a transfer of property from the creator of the trust to the trustee, such transfer is without consideration, resulting in vesting of the property legally in hands of the trustee, yet for the purpose of the provisions of the Act, it would not amount to a gift liable to tax under the Act in view of the fact that the trustee holds the property for the benefit of the beneficiary who in this case is the creator of the trust. In absence of any other beneficiary it cannot be stated that effectively any interest in the property has passed. In other words, the necessary attributes of ownership remain unfulfilled, i.e., the ownership which the settlor had remains with her though in the capacity as the sole beneficiary. Hence, on facts, taking into consideration the terms of the trust deed and in law it is not possible to hold that the Tribunal was right when it held that the assessee was rightly taxed under the Gift Tax Act, 1958, in respect of the shares of the value of Rs. 52,744 given to Bhavna Nalinkant Trust.