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1994 (2) TMI 1 - SC - Wealth-taxWhether, on the facts and in the circumstances of the case and on the interpretation of section 5(1A) of the Wealth-tax Act, 1957, the Appellate Tribunal is right in law in holding that the assessee is entitled to exemption of Rs. 70,000 invested by her in National Defence Certificates and Defence Deposit Certificates in addition to the overall exemption of Rs. 1,50,000 granted to her by the Wealth-tax Officer, under section 5(1)
Issues: Interpretation of section 5(1A) of the Wealth-tax Act, 1957 regarding exemption limits for assets invested in National Defence Certificates and Defence Deposit Certificates.
The Supreme Court considered appeals arising from judgments of the High Court of Kerala regarding the interpretation of section 5(1A) of the Wealth-tax Act, 1957. The High Court answered questions related to the exemption of Rs. 70,000 invested in National Defence Certificates and Defence Deposit Certificates in addition to the overall exemption of Rs. 1,50,000. The High Court held that the exemption could not be granted over and above Rs. 1,50,000 due to the proviso to sub-section (1A) of section 5, which limited the exemption. The controversy centered around the interpretation of section 5(1A) of the Act, specifically focusing on the proviso and the assets exceeding the aggregate value of Rs. 1,50,000. The Department argued that the exemption limit could only be raised if the value of assets held prior to March 1, 1970, exceeded Rs. 1,50,000. The Court noted that the net wealth of the assessee had exceeded Rs. 1,50,000, including investments in shares of joint-stock companies. The proviso to sub-section (1A) would apply in such cases, raising the exemption limit. The Court emphasized the strict construction of taxation statutes and the lack of equity in tax provisions, dismissing arguments about potential hardships to small depositors. The Court upheld the High Court judgments, concluding that there was no legal infirmity. The appeals were dismissed with no order as to costs.
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