Law:

Section:

Proviso to section 4(1)(a) of the Wealth-tax Act, 1957 - Deemed wealth - Assessment year 1967-68 - Whether on a reading of the plain words of the proviso, the clause 'for any assessment year commencing after 31st day of March, 1964' can only be read as relating to gift-tax assessments and not to wealth-tax assessments and, as such, exemption under the proviso is attracted only to such gifts as were chargeable to tax for any assessment year commencing 'alter 31st day of March, 1964' - Held, yes Facts The assessee, the legal representative of the late Nawab, claimed in respect of the assessment year 1967-68 that the value of the immovable properties gifted by the late Nawab to his wives before 1-4-1964 should not be included in the net wealth of the Nawab as on the valuation date 31-9-1966. The Nawab under three deeds of gift one dated 25-5-1962, in favour of the assessee, his first wife, and two other deeds dated 17-8-1962 and 26-4-1962 in favour of 'F', his second wife, gifted in their favour certain lands and buildings of a total value of Rs. 1,96,950. The gifts were chargeable to gift-tax and were accordingly assessed to gift-tax in the assessment year 1963-64. It was claimed in the proceedings for assessment to wealth-tax for the assessment year 1967-68, that though the gifts were otherwise includible as belonging to the Nawab under section 4(1)(a)( i), as the transfers made to the spouses were otherwise than for adequate consideration, however, as the gifts were chargeable to gift-tax, the proviso to section 4(1)(a) was attracted and that the assets so transferred were not includible in the net wealth of the Nawab 'for any assessment year commencing after the 31st day of March 1964'. The WTO rejected this claim. The AAC, in the assessee's appeal, confirmed the assessment. In the assessee's further appeal before the Tribunal, the Tribunal, on a particular construction of the proviso, allowed the appeal and held that the assets transferred, which had attracted gift-tax, were not includible in the net wealth of the Nawab for the assessment year 1964-65 onwards. The High Court agreed with the construction placed on the proviso by the Tribunal. On appeal by…

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