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Interpretation of the term "jewellery" in the Wealth-tax Act, 1957 after the retrospective amendment by the Finance (No. 2) Act of 1971. Detailed Analysis: The judgment delivered by the High Court of Rajasthan involved the interpretation of the term "jewellery" in the Wealth-tax Act, 1957 following a retrospective amendment by the Finance (No. 2) Act of 1971. The central question before the court was whether ornaments made of gold, silver, platinum, or any precious or semi-precious stone were to be considered as "jewellery" for the purpose of wealth tax assessment. The court examined the legislative history of the relevant provisions, specifically focusing on Section 5(1)(viii) and (xv) of the Wealth-tax Act, which provided exemptions for assets like furniture, household utensils, and jewellery. The court noted that the term "jewellery" had been subject to amendments over the years, with the Finance Act of 1963 deleting Clause (xv) related to jewellery. The court referred to a Supreme Court decision in CWT v. Arundhati Balkrishna [1970] 77 ITR 505, which had previously addressed the scope of jewellery under the Act. The court highlighted that the Supreme Court had differentiated between jewellery intended for personal use and jewellery in general, emphasizing that the former was exempt from wealth tax under Section 5(1)(viii). Subsequently, the Finance (No. 2) Act of 1971 introduced amendments to Section 5(1)(viii), inserting the phrase "but not including jewellery" with retrospective effect from April 1, 1963. However, an Explanation added to the clause clarified that jewellery included ornaments made of precious metals or stones, with this definition coming into effect from April 1, 1972. The court considered conflicting interpretations of the term "jewellery" by various High Courts in India. Some courts, including Delhi, Allahabad, and Gujarat, held that gold ornaments without precious stones were not exempt from wealth tax under the retrospective amendment. In contrast, courts like Madhya Pradesh, Orissa, Calcutta, and Punjab and Haryana took a different view, stating that jewellery did not encompass gold ornaments lacking precious or semi-precious stones. The court aligned with the latter perspective, emphasizing that the ordinary meaning of jewellery did not extend to all ornaments but specifically included those with precious or semi-precious stones. The court also highlighted the distinction between ornaments and jewellery based on common parlance understanding. In conclusion, the High Court of Rajasthan ruled in favor of the assessees, affirming that the term "jewellery" under the Wealth-tax Act, 1957 did not cover ornaments made of gold, silver, platinum, or any precious metal without precious or semi-precious stones until April 1, 1972, as per the retrospective amendment by the Finance (No. 2) Act of 1971. The court's decision aligned with the interpretations of the Madhya Pradesh, Orissa, Calcutta, and Punjab and Haryana High Courts, emphasizing the need for precious or semi-precious stones to classify an ornament as jewellery for wealth tax assessment purposes.
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