1999 (12) TMI 52 - HC - Income Tax

Summary

Issues:
Interpretation of exemption under s. 5(1)(xxxiii) of the Wealth Tax Act, 1957 for an assessee returning to India with the intention of permanently residing therein.

Analysis:
The judgment involved a reference to a Full Bench regarding the correctness of a previous judgment in a case where an assessee claimed exemption under s. 5(1)(xxxiii) of the Wealth Tax Act, 1957. The factual background included the valuation of assets of an individual who was a partner in a partnership firm running a hotel in India. The dispute arose when the Assessing Officer enhanced the wealth of the assessee based on his share in the firm. The assessee claimed exemption under s. 5(1)(xxxiii) for investments made in India from remittances from abroad. The CIT(A) and Tribunal ruled in favor of the assessee, leading to the reference. The interpretation of the provision was crucial, with the Revenue arguing for a narrow view, while the assessee's counsel advocated for a broader interpretation in line with legislative intent.

The provision under s. 5(1)(xxxiii) exempted wealth tax for certain assets brought into India by a person of Indian origin returning to India with the intention of permanent residence. The amendment introduced by the Finance Act of 1986 clarified the scope of exemption, including assets brought within one year before return. The judgment analyzed the three categories of assets covered by the provision: remittances made earlier, assets brought into India, and investments after arrival. The court deliberated on the interpretation of "moneys and value of assets brought by him into India" and emphasized the significance of the assessee leaving the foreign country and returning to India for the exemption to apply.

The judgment cited legal principles regarding legislative interpretation and the use of subsequent legislation to clarify ambiguous provisions. It highlighted that the clear language of the statute for the relevant assessment year guided the decision. Ultimately, the court overruled the previous judgment and answered the reference question in favor of the Revenue, emphasizing a restrictive interpretation of the exemption provision.