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TMI Blog1970 (12) TMI 30X X X X Extracts X X X X X X X X Extracts X X X X ..... nable and proper, while those assets were assessed at a different value in the estate duty proceedings of the applicant's mother ? (4) Whether, on the facts and in the circumstances of the case, the value of the rice mill at Kota and of the house property in Madras gifted by the applicant to her minor sons is liable to inclusion in the net wealth of the applicant ?" In order to appreciate the scope of the reference, it is necessary to refer to the material facts which gave rise to the aforesaid questions : M. Sulochanamma, A. Jayalakahmamma and A. Sudarsanamma, the assessees, are three sisters who inherited the rights to exploit and win mica from the mines known as the Sitarama Mica Mine, the Siddeswara Mica Mine, the Rajyalakshmi Mica Mine and the Satyanarayana Mica Mine, in respect of which each of them had a one-third share. The Sitarama Mica Mine was granted on lease to the assessees' predecessor-in-title by the Central Government for a period of thirty years with effect from October 30, 1939. Parliament enacted the Mines and Minerals (Regulation and Development) Act, 1948 (53 of 1948), which came into force on September 8, 1948, for the purpose of regulating the mines and oi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... years with effect from October 30, 1960. For the assessment years 1957-58, 1959-60 and 1960-61, whose relevant valuation dates are on March 31, 1957, March 31, 1958, March 31, 1959, and March 31, 1960, respectively, each of the assessees, in the status of an individual, originally returned a one-third share in the Sitarama Mica Mine and valued the asset at Rs. 1,50,000. However, they sought to reduce the figure to Rs. 50,000 by a letter dated February 9, 1961, on the ground that the lease of the mine available to them was of a short duration on the respective valuation dates. The claim of the assessees that the unexpired portion of the lease on the relevant valuation dates was less than six years and, hence, no value at all should be adopted for that asset, was rejected by the Wealth-tax Officer who valued the one-third share of each assessee in the mine at Rs. 2,47,969, Rs. 2,50,421, Rs. 2,45,435 and Rs. 2,47,354, respectively, for the four assessment years on the basis of taking the unexpired leasehold periods on the relevant valuation dates as 13, 12, 11 and 10 years respectively. The Wealth-tax Officer, however, valued the Siddeswara, Rajyalakshmi and Satyanarayana Mica Mine ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sehold interest in a mica mine is property which can be owned and enjoyed by a person for a specific period. A mining lease for mica can be granted for a period of 20 years. On the facts and in the circumstances, we must answer question No. 1 in the affirmative and against the assessee. We feel it convenient to dispose of question No. 3 which lies in a short compass. The question relates to the reasonableness and propriety of the valuations of the Siddeswara, Rajyalakshmi and Satyanarayana Mines on the respective valuation dates. The finding of the Tribunal relating to the valuation of the aforesaid assets is one of fact supported by ample material on record. Hence, we have no hesitation to answer question No. 3 in the affirmative and against the assessee. We shall now turn to questions Nos. 2 and 4 in seriatim. Question No. 2 relates to all the assessees in respect of all the assessment years. The answer to this question depends upon the scope of the provisions of section 2(e)(v) of the Act and their application to the facts of the present case. It is profitable to notice clause (v) of section 2(e), which reads thus: " 'Assets' includes property of every description, movable or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... prohibition under sub-rule (4) of rule 6 of the Mining Leases (Modification of Terms) Rules, 1956, from exercising the power vested in the Controller of Mining Leases under rule 4 till that was deleted by the rule-making authority by G.S.R. No. 437 dated 1st June, 1958. However, we have to bear in mind the aforesaid admitted facts that on March 31, 1957, and March 31, 1958, there was neither an order passed by the Controller under rule 4, nor any threat or possibility of curtailing the period of lease in the instant case from 30 to 21 years. After the omission of rule 6(4) on June 1, 1958, the Controller was empowered to reduce the period of the lease granted in favour of the predecessor-in-interest of the assessees. However, we may add that mere threat or possibility of reducing the period of the mining lease by the Controller of Mining Leases by virtue of his power under rules 4 and 6 of the Mining Leases (Modification of Terms) Rules, 1956, read with rule 40 of the Mineral Concession Rules, cannot be equated to the passing of an order by him so as to reduce the period of lease granted for 30 years on October 30, 1939, to 21 years. It was only on August 26, 1958, that notice und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ect. The assessee's counsel relied upon sub-clause (iii) of clause 2 of the aforesaid order in support of his claim. Sub-clause (iii) of clause 2 of the order indicates that the clause following it shall be deemed to have been inserted in the lease deed and shall form part thereof. That has nothing to do with sub-clause (i) of clause 2 which preceded it, reducing the period of lease from 30 to 21 years. Such an interpretation as sought to be placed by the counsel for the assessees is not permissible in view of the specific provision made in clause 5 to the effect that the order shall take effect from its date, i.e., June 27, 1959. We shall now turn to the decision of this court in R. C. No. 23/64 on the basis of which it was contended by Mr. Dasaratharama Reddy that question No. 2 must be answered in favour of his clients on the application of the principle of res judicata. In that case, the question referred for the opinion of the High Court was whether the Tribunal was justified in law in adopting a period of 8 years as the basis for the valuation of the mines instead of 4 years. The Deputy Controller took the view that the unexpired portion of the mining lease granted to Ramana ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... apada Sabha and Devilal Modi v. Sales Tax Officer. That apart, on merits, with great respect to the learned judges, we are unable to subscribe to the view expressed by them that the order of the Controller of Mining Leases for India passed on June 27, 1959, was retrospective in operation and the accountable person could successfully urge in the appeal that the unexpired portion of the lease was only 4 years on the valuation date on the basis of the notification dated June 27, 1959. As pointed out earlier, clause 5 of the order specifically says that it will come into effect from the date of that order. There is no ambiguity in that regard. The order of the Controller reducing the period of the mining lease to 21 years was only prospective but not retrospective in operation. We are unable to find from the judgment of this court in R.C. No. 23/64 that this particular aspect was being considered. Further, the provisions of sub-rule (4) of rule 6, prohibiting the Controller from passing any order reducing the period of lease granted prior to the Rules coming into force, which was deleted only on June 1, 1958, was not taken notice of by the learned judges who decided R. C. No. 23/64. N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate or rates specified in the Schedule. The net wealth should be valued as on the corresponding valuation date pertaining to the assessment. The statement of facts referred to above manifests that there is no amendment of the Wealth-tax Act relating to the valuation date. Any subsequent events occurring after the relevant valuation dates relating to facts are neither relevant nor material for the purpose of ascertaining the value of the assets to be determined by the wealth-tax authorities under the Act. Even the law, if amended subsequent to the valuation dates prospectively and without express intendment or necessary implication giving retrospective effect applicable to those particular assessment years, can have no effect or application in determining the net wealth of any particular asset on the respective valuation dates for those assessment years. Applying the aforesaid principles, we shall consider the question whether the assessees are entitled to exemption under section 2(e)(v) of the Wealth-tax Act. Under section 4(1)(a), the value of the assets as on the valuation date must be included in computing the net wealth of an individual. In our judgment, the crucial dates bein ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e must undoubtedly be held to be an interest in property and the same has to be included in the net wealth for the assessment year 1960-61. We, therefore, answer question No. 2 in the negative and against the assessee. With regard to question No. 4, it is argued by Mr. Dasaratharama Reddy that the decision of the Supreme Court in Commissioner of Income-tax v. Sodra Devi concludes the matter in favour of the assessee. We may refer to the provisions of section 4(1)(a) of the Wealth-tax Act as it stood on the relevant valuation date, to the extent it is relevant and material for the point at issue and the provisions of section 16(3)(a) of the Indian Income-tax Act, 1922, which gave rise to the decision in Sodra Devi's case. Section 4(1)(a) of the Wealth-tax Act, 1957, is as follows: " In computing the net wealth of an individual, there shall be included, as belonging to him- (a) the value of assets which on the valuation date are held- (i) by his wife to whom such assets have been transferred by the individual, directly or indirectly, otherwise than for adequate consideration or in connection with an agreement to live separately, or (ii) by a minor child not being a married daug ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) is construed disjunctively we have no hesitation to hold that the words " an individual " occurring in the opening part of section 4(1) would refer to both a male and a female of the species. The value of the assets held by a minor child to whom such assets have been transferred by the individual otherwise than for adequate consideration shall be included in the net wealth of an individual. If sub-clause (ii) of clause (a) of sub-section (1) to section 4 is construed independently, we are of the opinion that the expression " the individual " would refer only to " an individual " specified in the beginning of section 4(1) and it may refer to a male or a female. The provisions of section 4(1)(a)(ii) are exactly in pari materia with section 16(3)(a) of the Income-tax Act re-framed by the Supreme Court in Sodra Devi's case. We may notice the following passage in the judgment of Bhagwati J. in Sodra Devi's case while dealing with the plea advanced on behalf of the revenue that "such individual" indicated both male as well as female of the species : "The crux of the question, therefore, is whether the words 'such individual' used in the opening part of section 16(3)(a) are used to mea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in which they have been used. See Maxwell's Interpretation of Statutes (twelfth edition, pages 61 and 141). Sri Dasaratharama Reddy, appearing for the assessees, realising this difficulty, had to concede that the provisions of section 4(1)(a)(ii) are similar and analogous to those of section 16(3)(ai) or (b) of the re-framed section pointed out by the Supreme Court in Sodra Devi's case but laid stress on the use of the words "as belonging to him" in section 4(1) so as to connote the expression "individual" to only a male but not a female. This submission of the assessees is devoid of any merit. It is well settled that the words implying masculine gender used in a statute shall, unless a contrary intention either expressly or by necessary intendment is specified, include feminine and the word singular means plural. See section 13 of the General Clauses Act, 1897 (X of 1897). In section 4(1), the use of the words "belonging to him" must be construed as "belonging to the individual" as they relate only to "an individual" used in the same clause. The use of the word "individual" in section 3 must undoubtedly be construed to have been used in a generic sense so as to take in a male as w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax Act, 1922. While dealing with the submission of the assessee relating to the use of the words "as belonging to him", it was observed by the learned judge, Veeraswami J. (as he then was), who spoke for the court, at page 124 thus : "The opening words of section 4 of the Wealth-tax Act speaks of 'an individual' followed by the words 'as belonging to him'. But section 13 of the General Clauses Act, 1897 (X of 1897), says that the words importing the masculine gender shall be taken to include females. That is also in consonance with the object of the Wealth-tax Act, for it is not conceivable that the legislature thought, for purposes of avoidance of evasion, a female should be treated exceptionally and left out of the purview of the net for evaders. The charging section, as we already mentioned, speaks of 'every individual' which, we have no doubt, includes a male and a female. When in the next section 'an individual' is mentioned though followed by the words, 'as belonging to him', we can find no adequate reason why it should be confined to a male, unless the context of each of the following clauses demands that interpretation. One need not be surprised that statutes do contain t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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