1992 (7) TMI 15 - HC - Wealth-tax

Summary

Issues:
Interpretation of exemption for jewellery under sections 5(1)(xiii) and 5(1)(viii) of the Wealth-tax Act, 1957.

Detailed Analysis:
The judgment involves a reference under section 27(1) of the Wealth-tax Act, 1957, regarding the exemption claim for jewellery by the assessee. The Tribunal referred three questions to the High Court for opinion. The primary issue was whether the Tribunal was justified in disallowing the claim for exemption of jewellery under sections 5(1)(viii) and 5(1)(xiii) of the Act. The Tribunal's decision was questioned for not considering the material points in dispute with reference to these sections.

The assessee, as the sole beneficiary and executor of his deceased wife's will, claimed exemption for jewellery under sections 5(1)(xiii) and 5(1)(viii) of the Act. The jewellery in question was considered heirloom and not intended for sale, following a traditional practice in Parsi families. The Tribunal and the Appellate Assistant Commissioner did not accept the assessee's contention.

The High Court analyzed the provisions of section 5(1)(xiii) and the legislative history regarding the exemption of jewellery. It was observed that jewellery was specifically excluded from the exemption under clause (xiii), as indicated by the language of the provision. The historical context of the legislation also supported this interpretation, with the exclusion of jewellery as articles of personal or household use under section 5(1)(viii) by an amendment in 1971.

The Court concluded that the plain reading of clause (xiii) clearly indicated that jewellery was not intended to be exempt under that provision. The expression "but not including jewellery" in the clause unambiguously excluded jewellery from the exemption, despite being considered heirloom and not intended for sale. The judgment favored the Revenue, answering the first and second questions in the affirmative and the third question in the negative.

The judgment was delivered by two judges, with both concurring on the decision. The detailed analysis provided a comprehensive understanding of the interpretation of exemption provisions for jewellery under the Wealth-tax Act, 1957, based on the specific language of the statute and its legislative history.