9911796707
TMI Blog1993 (11) TMI 39X X X X Extracts X X X X X X X X Extracts X X X X ..... of Rs. 1,50,000 under section 5(3) of the Wealth-tax Act, 1957 ?" The brief facts of the case are that the assessee made a gift of Rs. 3 lakhs to his minor son, Rajesh Kumar. The Wealth-tax Officer included this amount in the assessment of the assessee but allowed the exemption to the extent of Rs. 1,50,000 in accordance with the provisions of section 5(3) of the Wealth-tax Act. Subsequently, the assessment order was reopened and it was held that the assessee is not entitled to the exemption in respect of the deposit held by the minor son because the provisions of section 5(3) were amended with effect from April 1, 1975, i.e., for the assessment year 1975-76, when the words "held by him" were substituted by the words "owned by him". Accor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ovisions of section 5 shall apply in relation to such assets as if such assets were "belonging to the assessee". The words "belonging to the assessee" creates a deeming fiction and, therefore, if the assets are to be included in the net wealth by a deeming fiction, then the exemption under section 5 has to be allowed by the deeming fiction. As such the exemption to the extent of Rs. 1,50,000 has to be allowed to the assessee. In Nawab Sir Mir Osman Ali Khan v. CWT [1986] 162 ITR 888 (SC) it was held by the apex court that the liability to wealth-tax arises because of the belonging of the asset and not otherwise. Mere possession, or joint possession, unaccompanied by the right to be in possession or ownership of property, would, therefore, n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he asset of the spouse or minor child is to be included then the exemption attached to such asset has also to be given. The provisions of section 5(1) at the relevant time provided for an exemption to the extent of Rs. 1,50,000 in respect of "bank deposits". The exemption was not related to the person, but was related to the "bank deposit" subject to certain conditions being fulfilled. Since there is no dispute with regard to the other conditions, the exemption which was available to the minor child will be applicable to the assessee, who by the deeming fiction is considered as an owner. Under the provisions of section 4 of the Act, in computing the net wealth of an individual, assets which are transferred by an individual to his minor chil ..... X X X X Extracts X X X X X X X X Extracts X X X X
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