9911796707
TMI Blog1998 (11) TMI 44X X X X Extracts X X X X X X X X Extracts X X X X ..... , 1974, with effect from April 1, 1975. The assessment years with respect to which the question has arisen and the references have been made are 1976-77, 1977-78, 1978-79 and 1979-80. The annuity policy under which the assessee received payment during these years and the amounts so received was Rs. 2,70,000 in the previous year relevant to the assessment year 1976-77 and lesser sums for subsequent years were received pursuant to a policy taken out by a film producer Vijaya International, which produced the film "Nam Naadu" in which the assessee had acted, the assessee at that time having been a film actress. The policy was taken out pursuant to an agreement between the firm "Natyakalaniketan" of which the assessee and her mother were partners and the film producer. The policy provided for annual payments from April 1, 1974. to April 1, 1980. The payments were to be made to the firm and not to the assessee. However, well before 1974, the firm came to be dissolved on the death of the assessee's mother in the year 1971. Under the will left by her mother, the assessee became entitled to the interest of her mother in the firm, and the annuity payments which were otherwise payable to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the case, the Appellate Tribunal was right in law in holding that the right of annuity became the assessee's property only by succession and was not purchased by any other person in pursuance of a contract with the assessee and, therefore, not an 'asset' within the meaning of section 2(e)(1)(iv) of the Wealth-tax Act, 1957, and not includible in the net wealth of the assessee ?" As already observed the statutory provision relevant for these assessment years is 2(e)(2)(ii) and not the one mentioned in the order of reference. The correct provision of law is required to be and is treated as having been mentioned in the order of reference. Learned senior counsel for the Revenue submitted that the payments received by the assessee during these years were amounts received pursuant to in annuity policy which had been obtained by a person with whom the assessee had entered into a contract for that purpose and, therefore, though the amounts were not to be regarded as includible in her wealth for the years prior to the date of the amendment of section 2(e)(2)(ii), for the years subsequent to the amendment they were required to be included and have properly been included. Counsel submi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ict construction. Counsel in this context referred to the observation of the apex court in the case of CIT v. R. M. Chidambaram Pillai [1977] 106 ITR 292, at page 294, wherein it was observed thus : "If the intendment of a legislation misfires in court, competency being granted, the answer is amendment, not more litigation." Counsel relied on the words used in section 2(e)(2)(ii) which refers expressly to "assessee". Reference was also made to the definition of the term "assessee" in section 2(c) which defines "assessee" to mean a person by whom wealth-tax or any other sum of money is payable under the Act, and includes every person in respect of whom any proceeding under the Act has been taken for the determination of wealth-tax payable by him or by any other person on the amount of refund due to him or such other person. It was pointed out by counsel that the firm though not a "full person" for all purposes, is nevertheless recognised under the Wealth-tax Act. The charging section does not include the firm. Wealth-tax is chargeable only on the net wealth owned by the individual, Hindu undivided family and company. The word "assessee" therefore according to counsel, cannot pos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... individual partners in respect of the outstanding liabilities of the firm, individual partners do not have a right to enforce a contract between the firm and others by acting on their own. These propositions were properly not disputed by counsel for the Revenue and it is unnecessary to refer to the decisions relied upon. Learned counsel for the Revenue, however, submitted that this court in the case of R.Venkatavaradha Reddiar v. CWT [1995] 214 ITR 76 has held that for the purpose of section 5 of the Wealth-tax Act, the asset owned by the firm is to be regarded as an asset owned by the partner to the extent of the partner's share in the firm, and annuity also being an asset, the assessee as a partner had a vested right therein. The recognition by the court of the right of an assessee to claim exemption for the purpose of section 5 with regard to the value of his or her share in the asset of the firm must be confined to that provision. We are required here to construe a different statutory provision and the meaning to be attributed to the words used therein cannot be regarded as having been settled by reason of construction of another term in another statutory provision. The ..... X X X X Extracts X X X X X X X X Extracts X X X X
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