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Interpretation of proviso to section 5(1A) of the Wealth-tax Act, 1957 regarding exemption on investment in Post Office National Defence Certificates. Analysis: The judgment involves three wealth-tax appeals for the assessment years 1974-75 to 1976-77, where the main issue is the interpretation of the proviso to section 5(1A) of the Wealth-tax Act, 1957, concerning exemption on investment in Post Office National Defence Certificates. The assessee, a HUF, claimed exemption under the proviso for the investment made jointly with his wife. The WTO rejected the claim, citing a plain reading of the section and the Finance Act, 1970. The AAC, however, following the Madras Bench 'B' of the Tribunal, ruled in favor of the assessee, emphasizing that the investment was within the permissible limit. The revenue appealed to the ITAT challenging the AAC's decision for all three assessment years. The ITAT considered the arguments of both parties and analyzed the relevant provisions. It noted that the revenue's interpretation would render the proviso unworkable and contrary to the legislative intent. Referring to section 5(1)(xvi) and the investment limit for joint names, the ITAT concluded that denying exemption based on exceeding the overall limit of Rs. 1,50,000 would be unreasonable. It highlighted that the investment should not be required to exceed the prescribed limits for each type of investment before the proviso can apply. The ITAT aligned with the Madras Bench and the Kerala High Court's interpretation, emphasizing the clear language of the proviso. Moreover, the ITAT discussed the Kerala High Court's decision in H.H. Sethu's case, emphasizing that the ceiling of Rs. 1,50,000 under section 5(1A) could be enhanced by investments specified in clauses (xv) and (xvi), limited to the maximum eligible for exemption individually. It also addressed the relevance of the Finance Act, 1970, and the speech of the Finance Minister in interpreting the statutory provisions. Ultimately, the ITAT upheld the AAC's decision, ruling in favor of the assessee for all three assessment years, dismissing the revenue's appeals. In conclusion, the judgment clarifies the interpretation of the proviso to section 5(1A) of the Wealth-tax Act, 1957, regarding exemption on investments in Post Office National Defence Certificates. It emphasizes the importance of adhering to the statutory language and legislative intent while considering the permissible limits for investment exemptions, ultimately ruling in favor of the assessee based on a comprehensive analysis of the relevant provisions and judicial precedents.
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