Law: Wealth Tax Act, 1957

Section: 4(1)(a)(ii),2(m)

Law: Income Tax Act, 1961

Section: 64(iii)

Law: Income Tax Act, 1922

Section: 16(3)(a)(iv)

Wealth tax--- ---- Transfer of assets ---Assessee having bank account in name of minor son---Assessee gifting that amount to minor son---Interest accruing on amount gifted not includible in wealth of assessee--Indian Wealth-tax Act, 1957, S.4(1)(a)(ii). The provisions of section 4 of the Wealth-tax Act, 1957, create a fiction by which the value of certain assets has to be included in the net wealth. It has been provided under clause (ii) of section 4(1)(a) that the value of such assets which have been transferred could be included in the net wealth. The word "such assets" can be interpreted to mean only those assets which have been transferred. It is a different matter that if assets have been converted into some other form, then the value thereof could be included in the net wealth. In case the asset transferred is cash, then it is only the amount which has been transferred that could be considered to be such assets which could be included in computing the net wealth of the assessee on the valuation date. The accretion on the transferred assets have not been included by the plain language used in the section. The fiction which has been created cannot be extended beyond the clear wording which has been used therein. It would be creating another fiction to include the accrual from the transferred assets for inclusion in the net wealth of the assesses. It has not been contemplated by that section. The charge can be created by specific and unambiguous words and neither can there be any presumption in respect thereof nor could the meaning be extended beyond what has specifically been included. Where the assessee who had a bank account showing the closing balance in the name of his minor son on the relevant valuation date which was shown by the assessee in his wealth-tax return and the assessee gifted that amount to his minor son, the interest accruing on the amount gifted is not includible in the net wealth of the assessee under section 4(1)(a) of the Wealth-tax Act, 1957. CIT v. Prem Bhai Parekh (1970) 77 ITR 27 (SC); CIT v, Saraswathi Achi (T.) (1982).133 ITR 315 (Mad.); CWT v. Kishanlal Bubna (1976) 103 ITR 56 (Bom.); CWT v. Sarawathi Achi (T.) (1980) 125 ITR…

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