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TMI Blog1981 (8) TMI 154X X X X Extracts X X X X X X X X Extracts X X X X ..... 's assessments upto the asst. yr. 1972-73 under s. 5(1)(xx). The WTO in making the assessments had denied exemption on the share holdings of the assessees on the ground that they fall under the category of shares mentioned under s. 5(1)(xx) and the five years period of exemption has expired. 2. Before the AAC in appeal against the WTO's orders the assessees contented that s. 5(1)(Xx) given exemption without any monetary limits to the equity shares in industrial companies forming part of the initial issue for the first five assessment years and thereafter the assessee is entitled to exemption upto the limit of Rs. 1,50,000 under s. 5(1)(xxiii) r/w s. 5(1A). The AAC rejected this contention pointing out that the monetary limit of Rs. 1,50,0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ), (xxii), (xxiii), (xxiv), (xxv), (xxvi), (xxvii), (xxviii), (xxix), (xxxi), and (xxxii) (not being deposits under the Post Office Savings Bank (Cumulative Time Deposits) Rules, 1959 to the extent the value thereof exceeds, in the aggregate, a sum of one hundred and fifty thousand rupees..." Sub-cl. (xxiii) and s. 5 (1A) were inserted by s. 26 of the Finance Act, 1970 w.e.f. 1st April, 1971. The memo explaining all the provisions of the Finance Bill, 1970 states regarding the above amendment : in order to widen the area of investments in financial assets qualifying for exemption from Wealth-tax it is proposed to extend the exemption from Wealth-tax in the following categories of investments: (b) Shares in Indian Companies......(75 ITR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... epartment's plea is that sub-cls. (xx) and (xxiii) are mutually exclusive and once the assessee has enjoyed exemption under s.ub-cl(xx), such shares would fall outside the pale of sub-cl. (xxiii). No authority to support this proposition is placed before us. In any event if two interpretations are possible the one which is favourable to the assessee will have to be adopted, having regard to the ratio of the Supreme Court decision in CIT vs. Vegetable Products Ltd. 1973 CTR (SC) 177 :(1973) 88 ITR 192 (SC). We would, therefore, hold that the assessees in question are entitled to exemption in respect of their share holdings under s. 5(1)(xxiii) r/w s. 5(1A) for the assessment years in question. In the result, the assessee's appeals are allowe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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