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TMI Blog1983 (2) TMI 56X X X X Extracts X X X X X X X X Extracts X X X X ..... occupation. Further the gift was of cash and not of immovable property which was included under section 4 of the Wealth-tax Act. 2. Without prejudice to the above, the AAC further erred in allowing the exemption to the extent of Rs. 71,465. Since exemption in the case of assessee's wife was allowed to the extent of Rs. 65,130, in the assessee's case, the same should have been allowed to the extent of Rs. 34,870 only making an aggregate exemption of Rs. 1 lakh only. " The assessee had gifted an amount of Rs. 71,468 to Mrs. Parinben, wife of the assessee, which amount she had utilised for constructing a house property. The assessee had shown the said amount in his hands in accordance with the provisions of section 4(1)(a) of the Wealth-ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the hands of the assessee under section 4(1)(a), was the value of asset which had been actually transferred by the assessee although the form of asset had undergone a change since the date of transfer. Therefore, in the instant case, the cash value of gift was wholly includible in the hands of the assessee and the exemption under section 5(1)(iv) was not admissible. 4. The assessee in the written submission has contended firstly that the exemption under section 5(1)(iv) was allowed for the assessment years 1974-75 to 1978-79 in the orders passed under section 16(1) of the Act. The dispute arose for the years under appeal in regard to the market value of the property and the WTO had allowed the exemption in the hands of the assessee's wif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s 4(1)(a), 4(3)(b) and 5(1)(iv) in support of his contention that the value of the said gift is exempt from tax. In order to appreciate the assessee's contention we refer to the decision in Bubna's case, in which the facts were that the assessee created two trusts and transferred two amounts of Rs. 25,101 and Rs. 21,201 to the trustees for the benefit of his two minor daughters. The trustees purchased shares out of the trust funds. The WTO took the view that the market value of the shares on the valuation date amounting to Rs. 75,610 was to be included in the net wealth of the assessee as transferor. The Tribunal held that the value of cash assets transferred to Rs. 46,302 (sic) should alone be included in the net wealth of the assessee. On ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of the original assets irrespective of the fact whether the original assets are retained in the form in which they are transferred or they are converted into different types of assets. In either case, it is the value of the assets that are transferred that is to be determined as on the relevant valuation date. There can be no controversy as regards the value of the assets transferred when the assets so transferred are in the form of money. In the present case, under the two trusts the trust is created for the cash amount of Rs. 46,302. Thus, the value of the assets like cash amount on the valuation date would remain the same unless devaluation of money has taken place by reducing the value of a rupee. Such a case does not arise in the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in section 4(3)(b), the assessee was entitled to the exemption under section 5(1)(iv). We shall, therefore, refer to the said provisions which read as follows : " 4(3)(b) the provisions of section 5 shall apply in relation to such assets as if such assets were assets belonging to the assessee. " This section to our mind has been introduced in order to give full effect to the fiction enacted in section 4(1)(a). Under section 4(1)(a), the value of the assets which on valuation dates are held by the spouse of an individual 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 apart, are includible in computing the net weal ..... X X X X Extracts X X X X X X X X Extracts X X X X
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