Law:

Section:

Section 5, read with section 7, of the Wealth-tax Act, 1957 - Exemptions - Position prior to 1-4-1993 - Assessment year 1981-82 - Whether where assets are otherwise included in net wealth of an assessee or includible, if assessee shows that assets are those which are specified in any one of clauses mentioned in section 5(1), such assets are not required to be included in net wealth of assessee - Held, yes - Whether question of valuation of an asset can arise only if a particular asset is required to be included for purposes of levying wealth-tax in relation to an assessment year, but where asset is not required to be included in net wealth, it will not be necessary to undertake exercise of valuing said asset, and, thus, provisions of section 7 cannot govern availability or otherwise of exemption under section 5 - Held, yes FACTS The assessee-claimed exemption under section 5(1)(xxa) in respect of certain shares. However, the WTO disallowed exemption on the grounds that those shares were held by the assessee as a dealer; that the business assets were to be valued under section 7(1) or under section 7(2) after making adjustments under rules 2A to 2G of the Wealth-tax Rules, 1957; that the shares were not directly purchased by the assessee from the company and did not pertain to initial issue of share capital, and; that requirements of section 5(3) were not fulfilled, in asmuch as the shares were not held by the assessee for a minimum period of six months. On appeal, the Commissioner (Appeals) allowed the claim holding that similar claims in the assessee's own case were allowed in earlier years, and further that on a plain reading of section 5(1)(xxa), the interpretation placed by the Assessing Officer did not flow, namely, that exemption under the said provision was not available to an assessee who was treated as a dealer in shares. On the revenue's appeal, the Tribunal upheld that findings recorded by the Commissioner (Appeals). On reference : HELD The definition clause given in section 2(e ) states that 'assets' includes property of every description, movable or immovable, but does not include the assets specified thereafter. Admittedly, for the year under…

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