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TMI Blog1968 (2) TMI 5X X X X Extracts X X X X X X X X Extracts X X X X ..... he exclusion of the value of jewellery amounting to Rs. 27,27,330 from the Computation of his wealth ? 3. Whether any part of the amount of Rs. 36,87,419, fixed as compensation payable to the assessee under the Bihar Land Reforms Act, is liable for inclusion in the total wealth of the assessee ? " The assessee was the late Maharajadhiraja of Darbhanga. While computing his net assets for the purpose of the Wealth-tax Act, a dispute arose, in respect of (1) the deduction from the market value of the shares held by the assessee of the brokerage commission (question No. 1), (2) complete exclusion from the assets of those ornaments and jewellery of the Darbhanga Raj which were intended for the personal or household use of the Maharajadhiraja (question No. 2), and (3) the exclusion from the total assets of any part of the amount of compensation which was not actually paid to him by the State (question No. 3). Questions No. 3.-Mr. Lalnarayan Sinha for the assessee, quite fairly, stated that, in view of a Bench decision of this court in Maharaj Kumar Kamal Singh v. Commissioner of Wealth-tax , this question must be answered against the assessee. In that decision, it was held that, as so ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tocks and shares, the contract price includes the brokerage, and, consequently, the price quoted at the stock exchange should be held to include the brokerage also, and that such brokerage must be deducted in estimating the price which the stocks and shares would fetch in the open market. He has, however, not been able to cite any authority in support of this contention. On the other hand, the English decisions are all against him. In Green on Death Duty, 6th edition, at page 393, while discussing the principal value, of, stocks and shares for the purpose of death duty, it is observed : " The price which property 'fetches' is the gross price paid by the purchaser, without deduction for the vendor's costs and expenses." The language of the relevant statutory provision in force in Britain is : " Principal value means the price which the property would have fetched on the death of the deceased in the open market." It will be noticed that this language is very similar to section 7(1) of the Act, and the aforesaid observation would, therefore, apply with equal force. It was, however, urged that the net price which would be actually received by the seller (the assessee) should alone ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... use of the assessee ", occurring in clause (viii), should be so construed as excluding jewellery even though, due to family custom or other reasons, some of these ornaments might have been intended by the assessee for his personal use. I should, however, mention here that clause (xv) of subsection (1) of section 5 has been deleted by the Finance Act, 1963 ; but we are concerned here with the law as it stood prior to that amendment. There can be no doubt that a premier zamindar in the State of Bihar as the assessee may have kept in his possession several ornaments which were intended for his personal use. It may also be true, as urged by Mr. Lalnarayan Sinha for the assessee, that some other ornaments, including precious stones, might have been kept by the assessee not for personal use but solely as capital kept in a convenient form. He, therefore, urged that the wealth-tax authorities should not have rejected totally the claim of the assessee but should have examined every item of the jewellery with a view to decide whether it was intended for personal use, and then decided whether to apply clause (viii) or clause (xv). So far as wearing apparel is concerned, there may be some d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... garded as possessing very considerable value of an explanatory nature regarding the legislative intent where the meaning of a statute is obscure ". Thus, in In re Central Provinces and Berar Act No. XIV of 1938 the white paper and the report of the joint select committee thereon were referred, to while construing some provisions of the Government of India Act, 1935. Similarly, in Gopalan's case the report of the drafting committee was referred to " not to control the meaning of the article, but may be seen in case of ambiguity ". In the well-known In re Hamlin it was observed : " Reports of legislative committees having in charge the preparation of proposed laws may be consulted, as a source of information in the endeavour to ascertain the legislative intent, in a situation where the meaning of the statute is doubtful . Amendments or modifications of a bill, and the action of the legislature thereon, may serve as guides on the meaning of a doubtful law." When the Wealth-tax Bill was placed before Parliament (Bill No. 14 of 1957), there was no clause corresponding to clause (xv); but, on the other hand, in sub-clause (vi) of clause (5) of the Bill, " jewellery " was included as fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o provide a separate clause for jewellery, and fixed a maximum amount of exemption for jewellery. The reasonable inference, therefore, seems to be that all classes of jewellery, excluding perhaps ornaments and precious stones sewn or worked into the wearing apparel, would be outside the scope of clause (viii) altogether and should be dealt with only under clause (xv). In my opinion, therefore, both on the principle of statutory construction that a special provision must override the general provision and also on a careful scrutiny of the history of legislation dealing with the insertion of clauses (viii) and (xv) in sub-section (1) of section 5, the view taken by the wealth-tax authorities must be held to be correct. I would, therefore, answer the three questions as follows : Question No. 1.-The answer is in the negative. The brokerage commission cannot be deducted from the market value of the shares. Question No. 2.-The answer is in the negative. The assessee is not entitled to exclusion of the value of the jewellery, even though such jewellery may be intended for his personal use. The only exemption he could claim is up to the limit of Rs. 25,000, as permitted in clause (xv). ..... X X X X Extracts X X X X X X X X Extracts X X X X
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