1982 (7) TMI 107 - AT - Wealth-tax

Summary

Issues:
1. Interpretation of exemption under section 5(1)(xxxiii) of the Wealth-tax Act, 1957 for individuals of Indian origin returning to India.
2. Dispute over the retrospective or prospective application of the exemption provision.
3. Consideration of the intention behind the exemption provision and its applicability to individuals arriving in India before or after the enactment of the provision.

Detailed Analysis:
The judgment involves two appeals filed against the orders of the Commissioner, Karnataka-II, regarding wealth-tax assessments for the assessment years 1978-79 and 1979-80. The main issue revolves around the interpretation of the exemption under section 5(1)(xxxiii) of the Wealth-tax Act, 1957, which pertains to individuals of Indian origin returning to India with assets purchased from abroad. The Commissioner contended that the exemption was only available to those who arrived in India after 1-4-1977 when the provision was introduced. However, the appellant argued that he met the conditions for exemption and had successfully claimed it for the preceding year 1977-78. The departmental representative asserted that the exemption was intended for future entrants and should operate prospectively.

Upon careful consideration, the Appellate Tribunal clarified that the exemption provision introduced by the Finance Act, 1976, had prospective application from 1-4-1977 but did not mandate that the individual's arrival in India should be after the enactment. The clause did not specify any such condition, and the intention behind the exemption was to benefit all persons of Indian origin bringing funds to India, regardless of their arrival date. The Tribunal noted that individuals arriving before 1-4-1977 would not receive the full benefit of exemption for seven successive assessments but would be eligible for exemption from the assessment year 1977-78 onwards. The Tribunal emphasized that the provision operated prospectively, not retrospectively as assumed by the Commissioner, who had set aside the assessments for 1978-79 and 1979-80 while allowing the revision petition for 1977-78. Consequently, the Tribunal overturned the Commissioner's orders for 1978-79 and 1979-80, reinstating the assessments.

In conclusion, the appeals were allowed, and the orders passed by the Commissioner under section 25(2) of the Wealth-tax Act were cancelled. The judgment clarified the interpretation and application of the exemption provision under section 5(1)(xxxiii) for individuals of Indian origin returning to India with assets purchased from abroad, emphasizing the prospective nature of the provision and rejecting the Commissioner's retrospective interpretation.