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Commissioner of Wealth-tax Vs. Smt. Sonal K. Amin - Court Judgment

LegalCrystal Citation
SubjectDirect Taxation
CourtMadhya Pradesh High Court
Decided On
Case NumberMiscellaneous Civil Case No. 671 of 1974
Judge
Reported in(1980)16CTR(MP)391; [1981]127ITR427(MP); 1980MPLJ425
ActsWealth Tax Act, 1957 - Sections 5(1); Finance (No. 2) Act, 1971
AppellantCommissioner of Wealth-tax
RespondentSmt. Sonal K. Amin
Appellant AdvocateP.S. Khirwadkar, Adv.
Respondent AdvocateH.S. Srivastava, Adv.
Excerpt:
.....that onus shifts exclusively and heavily on him to prove his innocence. conviction of appellant is liable to be set aside. - in our opinion, it was clearly added to give a wider meaning to the word 'jewellery 'with effect from 1st april, 1972, and this wider meaning cannot be given for any prior assessment year......question. the gujarat, allahabad and punjab & haryana high courts have taken the view that the word ' jewellery ' would cover gold and silver ornaments irrespective of whether they are studded with precious stones or not and that the explanation was added as a matter of abundant caution. [seecwt v. jayantilal amratlal : [1976]102itr105(guj) , cwt v. maharaja vibhuti narain singh : [1979]117itr246(all) and cwt v. rajeshwar parshad [1975] tax lr 194 . contrary view has been taken on this point by the orissa and calcutta high courts. [see cwt v. binapani chakraborty [1978] 114 itr 82 and cwt v. aditya vikram birla : [1978]114itr711(cal) . having given our anxious consideration to the problem, we are inclined to agree with the view taken by the orissa and calcutta high courts which hold.....
Judgment:

G.P. Singh, C.J.

1. This is a reference under Section 27(1) of the W.T. Act, 1957. The question of law referred is as follows :

' Whether, on the,facts and in the circumstances of the case, the Appellate Tribunal was right in allowing exemption in respect of the value of gold and silver ornaments included in the value of jewellery under Section 5(1)(viii) of the Wealth-tax Act, 1957 '

2. The assessee in the present - reference is Smt. Sonal K. Amin. The assessment year is 1971-72 and the relevant valuation date is 30th October, 1970. The WTO, by order dated 29th March, 1972, included Rs. 50,000 in the net wealth of the assessee as value of ornaments and jewellery. The order was maintained by the AAC. The Tribunal accepted the assessee's appeal and held that the gold and silver ornaments, as distinguished from jewellery, were not includible in the net wealth being articles of personal use. The Tribunal remanded the case to the WTO for examining the correctness of the claim of the assessee in respect of such ornaments and to exclude their value from the net wealth. On an application made by the CWT, the Tribunal has referred the question which we have set out above.

3. Section 5 of the Act provides for exemption in respect of certain assets. Clause (viii) of Section 5(1), as originally enacted, granted exemption inrespect of 'furniture, household utensils, wearing apparel, provisions and other articles intended for personal or household use of the assessee '. Clause (xv) of the same section, as originally enacted, allowed exemption in respect of ' jewellery belonging to the assessee, subject to a maximum of twenty-five thousand rupees in value '. These clauses were construed by the Supreme Court in CWT v. Arundhati Balkrishna : [1970]77ITR505(SC) . It was held by the Supreme Court that jewellery intended for personal use of the assessee came within the scope of Section 5(1)(viii) being ' articles intended for personal use ' and that Section 5(1)(xv) dealt with jewellery in general whether intended for personal use of the assessee or not. To counteract the effect of this decision, Clause (viii) was amended by the Finance (No. 2) Act of 1961. The first amendment material for our purposes introduced by this Act in Clause (viii) was to add the words ' but not including jewellery ' with retrospective effect from 1st April, 1963. Another amendment to be taken notice of was addition of Expln. 1 with effect from 1st April, 1972. As a result of this Act, Clause (viii) of Section 5(1) has to be read as follows with effect from 1st April, 1963 :

' (viii) furniture, household utensils, wearing apparel, provisions and other articles intended for the personal or household use of the assessee, but not including jewellery. '

4. The Explanation referred to above which was also added by the same Act with effect from 1st April, 1972, is as under :

' Explanation 1.--For the purposes of this clause and Clause (xiii), ' jewellery ' includes--

(a) ornaments made of gold, silver, platinum or any other precious metal or any alloy containing one or more of such precious metals, whether or not containing any precious or semi-precious stone, and whether or not worked or sewn into any wearing apparel ;

(b) precious or semi-precious stones, whether or not set in any furniture, utensil or other article or worked or sewn into any wearing apparel.'

5. Explanation 1 set out above was not applicable for the assessment year with which we are concerned in this case. The question before us is whether the words ' but not including jewellery ' which were added in Clause (viii) with retrospective effect from 1st April, 1963, on a proper construction by themselves and without the aid of the Explanation, cover gold and silver ornaments not containing any precious or semi-precious stones. There appears to be a sharp divergence of opinion on this question. The Gujarat, Allahabad and Punjab & Haryana High Courts have taken the view that the word ' jewellery ' would cover gold and silver ornaments irrespective of whether they are studded with precious stones or not and that the Explanation was added as a matter of abundant caution. [SeeCWT v. Jayantilal Amratlal : [1976]102ITR105(Guj) , CWT v. Maharaja Vibhuti Narain Singh : [1979]117ITR246(All) and CWT v. Rajeshwar Parshad [1975] Tax LR 194 . Contrary view has been taken on this point by the Orissa and Calcutta High Courts. [See CWT v. Binapani Chakraborty [1978] 114 ITR 82 and CWT v. Aditya Vikram Birla : [1978]114ITR711(Cal) . Having given our anxious consideration to the problem, we are inclined to agree with the view taken by the Orissa and Calcutta High Courts which hold the view that by itself ' jewellery ' does not cover gold and silver ornaments not containing precious or semi-precious stones.

6. As the Explanation was added only with effect from 1st April, 1972, denning the word ' jewellery ', we cannot use it for the assessment year 1971-72. The meaning of Clause (viii) and the word ' jewellery ' has to be found out without the aid of the Explanation, The compact edition of the Oxford English Dictionary, Vol. I, p. 1508, gives the following meaning of ' jewel ' and ' jewellery ' :

' ' Jewel ': An article of value used for adornment, chiefly of the person ; a costly ornament, espone made of gold, silver, or precious stones. Obs. in general sense ; now restricted to a small ornament containing a precious stone or stones, worn for personal adornment.'

' ' Jewellery ' : jewellers work ; gems or ornaments made or sold by jewellers ; esp. precious stones in mountings ; jewels collectively or as a form of adornment.'

7. In the Reader's Digest Great Encyclopaedic Dictionary( Oxford Illustrated Dictionary, Vol. I, p. 468), the following meaning is given of the word ' jewel ' :

' ' Jewel ' : Ornament containing precious stone(s), worn for personal adornment; precious stone ; highly prized person or thing.--v. t. Adorn, furnish with jewels ; fit (watch) with jewels for the pivot-holds. Jeweller, jewellery, jewelry ns.'

8. A perusal of the dictionary meanings quoted above will go to show that in its generic sense the word ' jewel ' was capable of including costly ornaments made of gold and silver. But this meaning has become obsolete and the word is now restricted to mean ornaments containing precious stone or stones. Similarly, the word ' jewellery ' normally connotes precious stones in mountings and not all kinds of gold and silver ornaments. The ordinary meaning of the word ' jewellery ', in our opinion, therefore, does not embrace gold and silver ornaments which do not contain precious stones and it is in this sense that this word has to be understood in Clause (viii) before 1st April, 1972. By the Explanation that was added with effect from 1st April, 1972, a wider meaning is given to the word ' jewellery ' by including within it all ornaments whether or notcontaining any precious or semi-precious stones. But as this meaning, became effective only from 1st April, 1972, it cannot be used for restricting the exemption for any assessment year prior to that date. We do not accept the submission made by the learned counsel for the Commissioner that the Explanation was added as a matter of abundant caution. In our opinion, it was clearly added to give a wider meaning to the word ' jewellery ' with effect from 1st April, 1972, and this wider meaning cannot be given for any prior assessment year... The very fact that the words ' but not including jewellery ' were retrospectively added with effect from 1st April, 1963, and the Explanation was added only with effect from 1st April, 1972, by the same Finance Act gives out the clear intention of Parliament that the wider meaning given in the Explanation is not to be applied for any assessment year before 1st April, 1972.

9. For the reasons given above, our answer to the question is that the Appellate Tribunal was right in allowing exemption in respect of the gold and silver ornaments under Section 5(1)(viii) of the W.T. Act, 1957. There will be no order as to costs of this reference.


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