1. Both the above appeals arise out of the same facts and give rise to the same question. Therefore, they are dealt with by this common order.
They involve interpretation of Section 5(1)(xxxiii) of the Wealth-tax Act, 1957 ('the Act').
2. The assessee was in the service of the Government of India and had gone to USA on deputation to United Nations Development Programme. He resided there from 1-12-1972 to 30-11-1977 and returned thereafter. He repatriated certain sum out of his foreign earnings to this country and claimed it to be exempt under Section 5(1)(xxxiii). The WTO allowed his claim for both the assessment years.
3. The Commissioner, however, in exercise of his powers under Section 25(2) of the Act, held that the exemption was wrongly allowed, withdrew the same and directed the WTO to revise the assessments for both the years. His reasons are as follows : Clause (xxxiii) of Section 5(1) was inserted by the Finance Act, 1976 to encourage Indians living abroad to return to India with their foreign wealth. Its obvious application was to Indians settled abroad. In the instant case, the assessee had gone abroad on deputation to the United Nations Development Programme, that is to say, he was in Indian Government service and his services were placed temporarily at the disposal of the U.N. Organisation. The assessee had not resigned from Indian Government service prior to his joining the U.N. post and he continued to be an employee of the Indian Government while temporarily posted to the U.N. He also continued to remain an Indian citizen. On termination of the U.N. assignment, the assessee returned to India and resumed duties as Governor of the Reserve Bank of India.
4. Before us, Shri J.P. Shah argued that the words 'ordinarily residing in a foreign country' in the said Clause (xxxiii) of Section 5(1) have to be given a meaning which is understood in the usual sense, i.e., if at that time a question had been asked whether the assessee was residing, the answer would have been that he was residing in America.
5. The learned departmental representative has, on the other hand, relied upon the reasoning of the Commissioner.
6. In our view, the Commissioner has made a mistake in comparing the case of Indians settled abroad with the case of the assessee. It is true that such cases would be covered by the provisions but that does not mean that they are only the cases which are contemplated by it. He has placed considerable emphasis on the supposed temporary posting of the assessee abroad. We do not agree with this. We have to go by the language of the section. All that the clause requires is, that the assessee should have been ordinarily residing in a foreign country and on this point, the assessee's counsel is quite right. At the material time, the assessee could be said to be residing there on a semi-permanent basis. He was not there on a short trip or tour.
Further, at the time of hearing, we were informed by the assessee's counsel on instructions that according to the terms of U.N. posting, the assessee had option of renewing his deputation for a further period of five years. Therefore, it cannot be said that the assessee had any definite intention of returning to India at the expiration of the fixed period and, consequently, there was no definite time limit to stay there. Therefore, it could well be said that he was ordinarily residing in America. Therefore, the assessee is entitled to exemption under Section 5(1)(xxxiii). We set aside the orders of the Commissioner and restore that of the WTO.