9911796707
TMI Blog1983 (2) TMI 99X X X X Extracts X X X X X X X X Extracts X X X X ..... y amended by the WTO under section 35 of the Wealth-tax Act, 1957 ('the Act'), as per order dated 31-1-1979 and, consequently, assessed net wealth came to be reduced to Rs. 10,95,000 as rounded off. The said amendment order held that as on 31-3-1978, the assessee did not have two cars, but he had only one car and that the written down value thereof was Rs. 28,004. Thus, the value of professional assets came to be reduced by the said amendment from Rs. 59,207 as in the original assessment, to Rs. 40,084. 4. In the computation of the assessee's net wealth, the WTO included, inter alia : (i) Rs. 28,004 as the market value of car despite the assessee's claim that the same being below Rs. 30,000 was exempt from tax under section 5(1)(viii) or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the said fresh deposit had been owned by the assessee up to the valuation date 31-3-1978 for a period of less than 6 months and that, therefore, the bar in section 5(3)(b), came in the way of benefit of exemption. 9. Actually as up to 31-3-1978 the assessee had made following deposits in the CDS account : Rs. 15-3-1975 3,500 13-3-1976 4,500 23-2-1977 9,893 1-3-1978 11,840 ------------ 29, 733 ------------ On the other hand, the assessee had received payment of Rs. 700 on 18-5-1977 out of the said deposits by way of repayment of one-fifth of initial deposit dated 15-3-1975 (of Rs. 3,500) and the assessee had received further payment of Rs. 700 on 18-5-1977 itself by way of interest due on the said initial deposit of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment year commencing on the 1st day of April, 1970, or any subsequent assessment year-- (i) (ii) a right to any annuity (not being an annuity purchased by the assessee or purchased by any other person in pursuance of a contract with the assessee) in any case where the terms and conditions relating thereto preclude the commutation of any portion thereof into a lump sum grant ;" 11. The opening portion of the definition of the term 'assets' being widely worded, is held to include the assessee's right as available under section 8 of the CDS Act in respect of four deposits detailed hereinabove. Said section 8 of the CDS Act runs as under : "Repayment of compulsory deposit.--(1) The amount of compulsory deposit made by or recovered fro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder section 8, being a right to an annuity, as aforesaid, the revenue further contends that even if the said right of the assessee under section 8 of the CDS Act is held to be a right to annuity, as aforesaid, it would constitute an asset as defined in section 2(e)(2) of the Act, all the same, inasmuch as the annuity in question has been purchased by the assessee as contemplated in the portion within the parenthesis in item (ii) of section 2(e)(2) as reproduced above. 14. We first proceed to determine whether the assessee's right under section 8, is a right to an annuity and in any case not permitting of commutation of any portion of the annuity into a lump sum grant. At this stage, it is made clear that in respect of the four deposits d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and it should not be liable to variation depending upon or on any ground relating to the general income of the fund or estate which was charged for such payment. . . ." Our attention was also drawn to the definition of the term 'annuity' as it exists in Vol. II, 7th edition of Kanga and Palkhivala's commentary on Income-tax, in article XIX(2) of the agreement for Avoidance of Double Taxation between India and Belgium. The said definition runs as under : "(2) The term 'annuity' means a stated sum payable periodically at stated times, during life or during a specified or ascertainable period of time, under an obligation to make the payments in return for adequate and full consideration in money or money's worth." 18. In the present case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... I, 5th edition of Sampath Iyengar on Three New Taxes, laid down that the annuities receivable under the Annuity Deposit Scheme are generally non-commutable and are, hence, exempt under section 2(e)(iv) corresponding to section 2(e)(1)(iv) as the text stood after 31-3-1969. We, therefore, hold that on basis of proviso to section 8, it cannot be inferred that the said provision permits of general commutability of the right in question. Thus, the objection raised on the revenue's side on the basis of commutability fails. 22. The revenue also raised an argument that for exclusion of the right to an annuity from the ambit of the defined term 'assets', such annuity must not have been purchased by the assessee. This aspect is certainly relevant ..... X X X X Extracts X X X X X X X X Extracts X X X X
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