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TMI Blog1963 (9) TMI 83X X X X Extracts X X X X X X X X Extracts X X X X ..... f 12 years Post Officer National Savings Certificates of the value of ₹ 25,000 which stood in his name, as also 10 year 3 1/2% Treasury Savings Deposit Certificates of the value in all of ₹ 75,000 out of which, certificates of the value of ₹ 50,000 stood in his and his wife's joint names and the rest of the Certificates of the value of ₹ 25,000 in some other name or names. In addition to these certificates, each of the two assesses inherited certificates of the value of ₹ 1,00,000 upon the death of their brother, one Manubhai R. Patel. The holdings as on the 31st of December, 1957, of each of the two assessees in the aforesaid certificates were the same as those on the 31st of December, 1956. The assessee claimed exemption from wealth-tax in respect of these certificates and relied therefore on section 5(1), clause (xvi) of the Act. The Wealth-tax Officer granted exemption to the assessee, Harshad, in respect of certificates of Both the types of the value of ₹ 25,000 each, and so far as the assessee, Mahendra, was concerned, he granted exemption in respect of the 12 year National Savings Deposit Certificates of the value of ₹ 25,000 and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... were not includible in the wealth of the assessees. The Appellate Assistant Commissioner declined to accept either of the two contentions and held that the Wealth-tax Officer was entitled to include the value of these certificates in the net wealth of the assessees as the certificates which were admittedly owned by them including the certificates which stood in the names of their nominees. As regards section 5(1)(xvi), the Assistant Commissioner held that clause (xvi) applied only to those certificates which were held by the assessees, in other words, which stood in the names of the assessee, and that the concept of beneficial ownership or benami was unknown to section 5(1)(xvi) of the Act. In that view, he held that though the certificates standing in the names of their nominees were the assets of the assessees, includible in the wealth of the assesses, such of the certificates as did not stand in the wealth of the assessees, were not entitled to exemption and, therefore, were rightly included by the wealth-tax Officer in the taxable net wealth of the assessees. Aggrieved by the orders of the Assistant Commissioner, both the assessee filed appeals before the Tribunal and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he word assets . Section 5(1)(xvi) which is the section requires to be construed in this reference, provides as follows : 5. Exemption in respect of certain assets - (1) Wealth-tax shall not be payable by an assessee in respect of the following assets, and such assets shall not be included in the net wealth of the assessee - .... (xvi) ten year treasury savings deposit certificates, fifteen-year annuity certificates, deposits in post office savings banks, post office cash certificates, post office national savings certificates and twelve year national plan savings certificates held by the assessee. Clause (xvi) was subsequently amended, but so far as the present reference is concerned, it is clause (xvi) as it stood prior to the amendment and as cited above, which is relevant. It will be notices at once that both in the definition of net wealth as also in section 4 of the Act which provides for the net wealth to include certain assets set out therein, the legislature has used the expression belonging to the assessee but while enacting clause (xvi) in section 5(1) it has used the expression held by the assessee . The question is, whether the interpretation given ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ght of the context in which the words or expressions falling for interpretation are use by the legislature in the statute in question. In order, therefore, to appreciate the proper interpretation to be given to the expression held by the assessee in clause (xvi), it will be necessary to appreciate whether the legislature has used the two expressions, namely, belonging to and held by the assessee in different senses or not. The expression belonging to has been the subject-matter of construction in many a decision and courts have construed that expression as meaning having proprietary rights or interests ownership in the object in question. Thus, in Heritable Reversionary Co. Ltd. v. Millar the House of a Lords had to construe certain provisions in the Bankruptcy Act of 1856 of Scotland and in particular the expression belonging to the creditor as therein used, and, while doing so, Lord Macnaghten in his special observed at page 621 as follows : The words property and belonging to are not technical words in the law of scotland. They are to be understood, I think, in their ordinary signification. They are in fact convertible terms; you can hardly explain the one e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erson, such as his income, must be said to belong to the assessee and therefore would be his assets within the meaning of section 2(e) and would form part of the net wealth under section 4 of the Act. For the purpose of computation of his net wealth therefore, it therefore, it would not matter whether the property in question stands in his name or stands in the name of another person so long as the beneficial ownership therein vests in the assessee. The Tribunal, therefore, in our view, was right when it held that the value of those certificates was includible in the net wealth of the assessee. The real controversy in this reference, however, starts when we go to the question of interpretation to be given to the expression held by the assessee . The learned Advocate-General, in support of the limited construction he suggested, relied upon the decision in In re Wala Wynaad Indian Gold Mining Co. It was held there that a contributory of a company may present a petition to wind up the company where his name appears on the register as the holder of shares, though a trustee may have been appointed under a liquidation petition filed by such contributory, during the period of six mon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... older whose name is registered in the company register, whether the same meaning must be attached to the expression held by the assessee in clause (xvi) of section 5(1). Mr. Nanavatys contention was that a clause in one statute cannot be rightly construed in the light or context of another statute, and he argued that we must turn to the expression held by the assessee as used in the clause itself. The learned Advocate-General, however, pointed out that as appearing from the order of the Wealth-tax Officer, under the scheme under which these certificates were issued, there was a prescribed limit up to which only an individual could invest in these certificates, namely, that an individual could purchase these certificates only of the value of ₹ 25,000 and of ₹ 50,000 in case they were purchased in the joint names of himself and his wife. The learned Advocate-General contended that if it was considered necessary to lay down such as limit of holding, it would be highly improbable that the legislature, presumably being aware of such a limit, would ever think of granting exemption in respect of certificates were to be of the value of more than ₹ 25,000 they would ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s been granted under clause (xvi). Since in our view this is the only construction that can be given to the expression held by the assessee which governs the word certificates in the context in which this expression has been used in that clause, no question of a liberal interpretation of the expression held by the assessee as suggested by Mr. Nanavaty can possibly arise. We are clear in our minds that the legislature has used the expression held by the assessee as meaning certificates which are registered in the name of the assessee and which stand in his name and not the certificates of which beneficial ownership is vested in him, but which stand in the name or names of his nominee or nominees. In that view, the Wealth-tax Officer and the Assistant Commissioner were right when they came to the conclusion that it was only those certificates which stood in the names of the two assesses, and in one case in the name of the assessee and his wife, which were entitled to exemption under clause (xvi) and not the rest of the certificates, and the Tribunal was therefore in error in coming to the conclusion which it did. In the result, we answer the question in the negative. The a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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