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TMI Blog1973 (12) TMI 26X X X X Extracts X X X X X X X X Extracts X X X X ..... and ornaments amounting to Rs. 1,85,216 was exempt under section 5(1)(viii) of the Wealth-tax Act on the ground that they were meant for personal use of the ladies of the family. The Wealth-tax Officer rejected this claim of the assessee as the same was negatived in all the preceding assessments on the ground that the assessee was not entitled to claim exemption in respect of the jewellery owned by the family beyond a sum of Rs. 25,000 under section 5(1)(xv) of the said Act. As the jewellery and ornaments was last valued on December 31, 1959, and the value of the gold and jewellery had gone up considerably since that date, the Wealth-tax Officer enhanced the valuation by 12% as far as the gold ornaments were concerned and by 7 1/2% as far as other jewellery were concerned. He, therefore, after allowing the statutory exemption of Rs. 25,000 valued the jewellery and ornaments at Rs. 1,94,908. The assessee had also claimed deduction on account of income-tax liabilities for the assessment years from 1959-60 and the wealth-tax liability for the year 1962-63. This claim was rejected by the Wealth-tax Officer as, in his opinion, there was no liability for these taxes as it did not arise t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mplexion of exemption for the two assessment years involved in this reference, namely, 1963-64 and 1964-65. As far as the assessment year 1962-63 is involved in this reference, it was conceded on behalf of the revenue that the ratio of the decision of the Supreme Court in Commissioner of Wealth-tax v. Arundhati Balkrishna holds good. It was, therefore, submitted that the entire valuation of jewellery and ornaments belonging to the Hindu undivided family of the assessee is liable to be included in its net wealth for the assessment years 1963-64 and 1964-65. On behalf of the assessee the contention of the revenue in so far as it sought to include the valuation of jewellery of the Hindu undivided family of the assessee in its net wealth was conceded and accepted. However, the attempt of the revenue to include the golden ornaments as jewellery and, therefore, not liable to be exempted under section 5(1)(viii) in view of the amendment made by the Finance (No. 2) Act of 1971 was resisted on the ground amongst others that the Explanation 1, added to the said section 5(1)(viii) by the aforesaid amending Act for the first time included the golden ornaments in the "jewellery" by the inclusiv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in any furniture, utensil or other article or worked or sewn into any wearing apparel. Explanation 2.--For the purposes of this clause 'conveyance' means any motor car or other mechanically propelled vehicle, aircraft or boat." The effect of the amendment in so far as it excluded jewellery from the purview of the exemption with effect from April 1, 1963, is to supersede the decision of the Supreme Court in Commissioner of Wealth-tax v. Arundhati Balkrishna and neutralize the effect thereof. The Finance (No. 2) Act of 1971 also simultaneously deleted clause (xv) which provided exemption to jewellery belonging to the assessee subject to a maximum of Rs. 25,000 with effect from April 1, 1963, and altogether a new clause was substituted providing exemption to deposits under any scheme framed by the Central Government subject to the conditions prescribed therein. The said Act also added two provisos and Explanations to clause (viii) and these provisos and Explanations have been brought into effect prospectively from April 1, 1972. The dispute in this reference has arisen on account of Explanation 1 by which the legislature has tried to define the word "jewellery" for the purposes o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be entitled to claim successfully exemption for jewellery and ornaments irrespective of their value under clause (viii) of section 5(1) on the ground that they are articles intended for the personal use of the assessee in view of specific provision having been made in respect of jewellery belonging to the assessee under clause (xv) of section (5)(1) as then existing where an initial exemption of Rs. 25,000 was provided. The Division Bench of this High Court consisting of Bhagwati C. J. (as he then was) and Diwan J. (as he then was) rejected that contention of the revenue and held that jewellery and ornaments, if they were intended for the personal use of the assessee, were entitled to claim exemption irrespective of their valuation under clause (viii) of section 5(1). In the course of the judgment, Diwan J. (as he then was), speaking for the court, after referring to the decision in Casher v. Holmes, cited in Craies, and negativing the contention urged oh behalf of the revenue by the learned Advocate-General that in construing section 5(1)(viii) the principle of words of rank should be applied, observed as under: "On the strength of this decision, and particularly in view of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Balkrishna Hegde J. (as he then was), speaking for the court, held as under: "Under section 5(1)(xv) as it stood at the relevant time, every assessee was entitled to deduct a sum of Rs. 25,000 from out of the value of the jewellery in her possession whether the same was intended for her personal use or not but under section 5(1)(viii) the value of all the jewellery intended for the personal use of the assessee stands excluded in the computation of the net wealth of an assessee." The effect of the decision of the Gujarat High Court in Mrs. Arundhati's case as affirmed by the Supreme Court is that, having regard to the dictionary meaning and more particularly the relevant provisions of the Wealth-tax Act, the articles of ornaments studded with jewels or not, compendiously known as jewellery would not be liable to be included in the net wealth of an assessee, if intended for his personal use. The dictionary meaning of the word, "jewellery" is very clear. In the Random House Dictionary, unabridged edition, at page 767, the meaning of the word, "jewellery" is given as under: "1. a number of articles of gold, silver, precious stones, etc., for personal adornment. 2. any ornament ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... because Explanation 1 tries to include the gold or silver or other metal ornaments set with precious stones as jewellery, which de hors the said definition, could not have been, undoubtedly, articles other than jewellery. It has been strenuously urged on behalf of the assessee that the legislature has given an inclusive definition to the term "jewellery" by Explanation 1, and has made it applicable prospectively from April 1, 1972, and the word, "includes" as given in the Explanation 1 by the legislature should be considered a term of extension and that it tries to bring within its sweep those articles which could not have been included otherwise. In Stroud's Judicial Dictionary, 2nd edition, at page 945, we find the following observation dealing with the expression "include" and it has been pointed out as under: " 'Include' is very generally used in interpretation clauses in order to enlarge the meaning of words or phrases occurring in the body of the statute; and when it is so used, these words or phrases must be construed as comprehending, not only such things as they signify according to their natural import but also those things which the interpretation clause declares that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ply and which do not require any interpretation clause to bring them in; and in the natural and popular sense of the word, 'street', or the words 'new street', I should certainly understand a roadway with buildings on each side........" Again, in R. v. Pearce, Lush J. observed: "........... an interpretation clause should be used for the purpose of interpreting words which are ambiguous or equivocal, and not so as to disturb the meaning of such as are plain." In Ex parte Ferguson and Hutchinson, a question arose as to the meaning of the enactment in section 2 of the Merchant Shipping Act, 1854, that the word "ship" shall include "every description of vessel used in navigation not propelled by oars". It was contended that a fishing-boat fitted with two masts and a rudder but also with four oars, was not a ship within the meaning of the Act as it was propellable by oars. Negativing this contention Blackburn J. said, "when an Act says that certain words shall include certain things, the words must apply exclusively to that which they are to include. That is not so; the definition given of a 'ship' is in order that the word 'ship' may, have a more extensive meaning and the words ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Spinning and Manufacturing Co. Ltd. v. N. U. Raval: "One safe and infallible principle of the interpretation of taxing statutes is to read the words through to see if the rule is clearly stated. If the language employed gives the rule in words of sufficient clarity and precision, no more is required to be done. In such a case the task of interpretation hardly arises. The language used by the legislature best declares its intention and must be accepted as decisive of it." We are in respectful agreement with this well-known principle of interpretation enunciated by the Bombay High Court. Mr. Shah, therefore, urged that this is not a case of reference to a subsequent statute for construing a prior one. The amendments which have been introduced in section 5(1)(viii) with effect from two different dates are brought on the statute book by the same legislation and, therefore, the court must not accept ordinary dictionary meaning of the term "jewellery" as the dictionaries are often delusive guides in the construction of terms used in statutes. We are afraid that Mr. Shah has lost sight of the fact that though these two amendments have been inserted in section 5(1)(viii) by the same ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctive of their precious metal. It has been so recognized by a Division Bench of the Gujarat High Court in Commissioner of Wealth-tax v. Mrs. Arundhati Balkrishna, that "jewellery" includes ornaments. Mr. Shah has, therefore, attempted to persuade us that the word "includes" used in the Explanation 1 is equivalent to "means and includes" and it affords an exhaustive explanation of the meaning which must be invariably attached to the word "jewellery" for purposes of assessment in the relevant years. He relied on the decision of the Supreme Court in Smt. Ujjam Bai v. State of Uttar Pradesh, where the following observations of Lord Watson in Dilworth v. Commissioner of Stamps were quoted with a approval: "The word 'include' is very generally used in interpretation clauses in order to enlarge the meaning of words or phrases occurring in the body of the statute; and when it is so used these words or phrases must be construed as comprehending, not only such things as they signify according to their natural import but also those things which the interpretation clause declares that they shall include. But the word 'include' is susceptible of another construction, which may become imperati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t extent the said Explanation is prospective. In that view of the matter, therefore, the last contention of Mr. Shah that this definition is exhaustive should be rejected. Mr. Shah, therefore, ultimately urged that when two reasonably possible interpretations are open, the court should prefer one which would be favourable to the assessee. In our opinion, the question of preference does not arise as the interpretation canvassed on behalf of the assessee cannot be said to be reasonable or possible interpretation. The result is that we allow the reference so far as assessment years 1963-64 and 1964-65 are concerned and reject it as regards assessment year 1962-63 is concerned. We, therefore, answer the first question as under: "On the facts and in the circumstances of the case, jewellery including gold ornaments would not be entitled to exemption under section 5(1)(viii) for assessment years 1963-64 and 1964-65. They would be entitled to exemption only for assessment year 1962-63." As far as the second question was concerned, Mr. Kaji has not pressed the same. We, therefore, answer it as under: "On the facts and in the circumstances of the case the assessee is entitled to dedu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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