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TMI Blog1992 (8) TMI 98X X X X Extracts X X X X X X X X Extracts X X X X ..... country to India. He had claimed inter alia that the interest accrued thereon was exempt from wealth-tax under section 5(1)(xxxiii). The Wealth-tax Officer while granting him the exemption on the principal amount did not give that exemption in respect of the accrued interest. The Dy. Commissioner of Wealth-tax (Appeals), however, following the decision of the Tribunal, Madras Bench, in the case of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assets would be eligible for exemption. Therefore, according to the Tribunal, there was no reason why the position would be different where moneys brought in had increased by efflux of time on account of the interest earnings thereon. 2. The material part of section 5(1)(xxxiii) is as follows :--- " in the case of an assessee, being a person of Indian origin or a citizen of India (hereafter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pted under section 5(1)(xxxiii), the expression "out of" is of a common use. Thus, a shirt is made out of a piece of cloth, an item of jewellery is made out of a given quantity of precious metal, etc. If some decoration is added to the shirt or gems are added to the item of jewellery they are not out of the piece of cloth or the precious metal. In making the new item the old material is all consum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tal gains and there can be no tax on the interest as income. Interest is a price for the use of the capital amount. It is not acquired out of the capital amount but as a result of the permission to use the money. It is an asset acquired out of something which is appurtenant to the asset (i.e., its use) and not out of the asset. However, for the sake of consistency alone with the aforesaid order of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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