1990 (10) TMI 127 - AT - Wealth-tax

Summary

Issues:
Interpretation of section 5(1)(xxxiii) of the Wealth Tax Act for exemption eligibility based on the timing of bringing monies into India before permanently residing in the country.

Analysis:
The judgment by the Appellate Tribunal ITAT Cochin involved an appeal by the assessee regarding the entitlement to exemption under section 5(1)(xxxiii) of the Wealth Tax Act. The dispute centered on whether the appellant could claim exemption for monies brought into India on 15-3-1980, before leaving the foreign country on 22-4-1980 with the intention of permanently residing in India. The Revenue contended for a strict construction of the provision, emphasizing that the monies should have been brought by the assessee upon leaving the foreign country. However, the Tribunal rejected this narrow interpretation, highlighting the importance of the intention of the person to permanently reside in India. The Tribunal noted that some time is necessary for winding up affairs in the foreign country before returning to India, and assets brought during this preparation period should also qualify for exemption under section 5(1)(xxxiii). The insertion of certain words in the provision in 1987 was viewed as clarificatory and retrospective, supporting the assessee's claim for exemption. The Tribunal held that the assessee was entitled to the exemption for the monies remitted on 15-3-1980, just before returning to India.

In analyzing the case, the Tribunal distinguished it from a previous decision where the assessee had claimed exemption for assets brought or acquired several years before returning to India. The Tribunal's decision in the present case favored the assessee, emphasizing the broader interpretation of the provision to accommodate the practicalities of preparing for permanent residency in India. The judgment highlighted that the focus should be on the intention of the individual to permanently reside in India rather than a strict timeline of bringing assets into the country. Ultimately, the Tribunal allowed the appeals of the assessee, granting the exemption for the monies brought into India before the return to the country for permanent settlement.