1981 (10) TMI 99 - AT - Wealth-tax

Issues Involved:

1. Exemption under section 6(ii) of the Wealth-tax Act, 1957.
2. Deduction of income-tax and wealth-tax liabilities for the assessment year 1974-75.
3. Status determination of the assessee as non-resident or resident but not ordinarily resident.
4. Exemption under section 5(1)(xxxiii) of the Wealth-tax Act for the assessment years 1977-78 and 1978-79.

Issue-wise Detailed Analysis:

1. Exemption under section 6(ii) of the Wealth-tax Act, 1957:

The assessee, a citizen of India, claimed exemption for an amount of Rs. 19,68,810 deposited in her "Non-resident (External) Account." The Wealth-tax Officer (WTO) rejected this claim, stating that the assessee's status was "resident, but not ordinarily resident," and she had maintained a dwelling place in India for more than 182 days. The Commissioner (Appeals) accepted her status as non-resident but denied the exemption because the account had been converted to a resident account effective from 20-10-1973. The Appellate Tribunal found that the property was let out seasonally before the assessee occupied it and concluded that she did not maintain a dwelling place for 182 days. Thus, her status was non-resident, and the exemption should be granted as the deposits were held in a Non-resident (External) Account on the relevant valuation date, 31-3-1974.

2. Deduction of income-tax and wealth-tax liabilities for the assessment year 1974-75:

For the assessment years 1975-76, 1976-77, 1977-78, and 1978-79, the assessee claimed deductions for income-tax and wealth-tax liabilities for the year 1974-75. The Tribunal directed the allowance of these claims in the manner indicated for the year 1974-75.

3. Status determination of the assessee as non-resident or resident but not ordinarily resident:

The Tribunal examined the evidence and concluded that the assessee had not maintained a dwelling place in India for 182 days or more during the relevant previous year. The property was let out before her arrival in India in October 1973, and she occupied it only in November 1973. Therefore, her status for the relevant year was non-resident, and the department's objections were rejected.

4. Exemption under section 5(1)(xxxiii) of the Wealth-tax Act for the assessment years 1977-78 and 1978-79:

The assessee claimed exemption for the value of assets acquired by her out of moneys brought into India, including interest and accretions. The Commissioner (Appeals) allowed partial exemption but denied it for interest and accretions. The Tribunal held that the exemption under section 5(1)(xxxiii) applies to the accretion of moneys brought into India, as these represent assets acquired out of such moneys. The Tribunal rejected the department's contention that the exemption applies only to persons returning to India on or after 1-4-1977. It concluded that the exemption is available for a period of seven successive assessment years from the date of return, and in this case, for four assessment years commencing from 1977-78.

Conclusion:

The assessee's appeals were allowed, granting her the exemptions and deductions claimed. The department's appeals were dismissed.

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