1. At the instance of the Commissioner of Wealth-tax, Gujarat, the following question is referred to us for our advice :
'Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the fixed deposits blocked account of the assessee in the Ceylonese bank, the face value of which has been subjected to tax in the assessee's wealth-tax assessment was not cash and, therefore, it should have been valued under section 7(1) of the Wealth-tax act, 1957 ?'
2. 'Briefly stated, the facts leadings to this reference are as under :
The assessment year involved in this reference are 1969-70 to 1973-74. The assessee is a repatriate from Ceylon where he was carrying on business. The assessee claimed that he was compelled to leave, Ceylon and that though he was permitted to visit that country occasionally for short duration, he was not allowed to carry on business there, with the result that he left behind certain assets which were, under the directions of the Cyclone Government, required to be disposed of and the proceeds realised had to be kept with Cyclone Bank. Though it not clear from the statement of the case, it appears that the assets were disposed of somewhere in 1968-69 and the amount so realised and deposited in the Chartered Bank of Cyclone in a fixed deposit account, as converted in to Indian currency at the official rate of exchange as on the valuation date, was as shown below : Assessment years from 1969-70 to 1973-74 : Assessment year AmountRs.1969-70 3,01,2151970-71 3,06,6901971-72 2,96,3891972-73 2,91,4641973-74 4,57,887
3. It should be stated for putting the record straight that in the statement of the case, the balance shown for the assessment year 1973-74 is Rs. 4,57,887. But as it appears from the assessment order of the WTO, annexed to the statement of the case, it was Rs. 2,91,464. In the return, the assessee claimed that on account, of various restrictions on the operation of the said account, the value of the deposit should be taken under s. 7(1) of the W. T. Act, 1957 (hereafter referred to as 'the Act'), at 40 per cent. of the value of the deposit. In support of this claim, the assessee had produced a letter received from the Chartered Bank, Colombo, dated February 15, 1971, stating to the effect that the exchange control authorities of the Government of Cyclone did not permit the remittance of capital funds for the time being and in case of permission being granted by the authorities to remit the balance at the foot of account in the books of the said bank, which amounted to Rs. 2,31,328.81 (which appears to be in ceylonese rupees), it would be subject to the purchase of the foreign exchange entitlement certificate which would be of the value of 55 per cent. of the aforesaid sum, leaving for remittance an net balance of approximately Rs. 1,49,243.22. The WTO did not accept the assessee's claim and having regard to s. 2(m) of the Act, included the entire value of the fixed deposit converted in to Indian currency in the total wealth of the assessee in respect of all the five years. Being aggrieved with this order of the WTO, the assessee carried the matter in appeal before the AAC, who dismissed five appeals by a common order confirming the order the WTO. In further appeal to Tribunal, the assessee could persuade the Tribunal that the WTO was not justified in including the entire amount of the fixed deposits as converted in to Indian currency in the net wealth of the assessee, since the said deposit did not amount to cash and, therefore, required proper valuation thereof at the hands of the WTO. This contention of the assessee found favor with the Tribunal which held that the fixed deposit in the blocked account and subject to restrictions cannot be treated as equivalent to cash though for all intents and purposes, it would be a taxable asset. The tribunal therefore, set aside the order of the AAC on the limited ground that while the blocked deposit was a part of the taxable wealth of the assessee, its value should be worked out under s. 7(1) of the Act. The commissioner has, therefore, claimed this reference which has been granted setting out the question as aforesaid to us for our advice.
4. The next question of law arises as to whether the amount belonging to an Indian national and lying in the frozen fixed deposit account in the bank in a foreign country and subject to temporary restraint prohibiting repartriation of such amount and permitting repatriation, if at all of the balance amount only after certain deduction would amount to cash so as to entitle the wealth-tax authorities to take the face value thereof for the purpose of computation of the wealth-tax liability of the assessee. Section 3 of the Act is a charging section which provide that subject to the other provisions contained in the Act, there shall be charged for every assessment year commencing on and from the first day of April, 1957, a tax in respect of the net wealth on the corresponding valuation date of every individual, HUF and company at the rate or rates specified in the Schedule. Section 2(m) defines net wealth to mean the amount by which the aggretate value computed in accordance with the provisions of the Act of all the assets, wherever located, belonging to the assessee on the valuation date, including assets required to be included in his net wealth as on that date under the Act, is in excess of the aggregate value of all the debts owed by the assessee on the valuation date other than those specified in s. 2(e). Section 4 enumerates as to what assets are to be included in the net wealth of the individual. Section 2(e) defines 'assets' which includes property of every description, movable or immovable, but does not include those specified therin. Section 5 enumerates assets which are exempted from the purview of wealth-tax liability. Section 6, with which we are not concerned, provides for exclusion of assets which are exempted from the purview of wealth-tax liability. Section 6, with which we are not concerned, provides for exclusion of assets and debts outside India of an individual who is not a citizen of India or who is a non-resident or a resident but not ordinarily resident in India and a HUF having the same status or a company not resident in India during the year ending on the valuation date. It should be noted at this stage that the assessee in the present case is a citizen (of India). Section 7 provides for the determination of the value of assets. Material part of s. 7 which is relevant for the purpose of this reference reads as under.
'7. (1). Subject to any rules made in this behalf, the value of any asset, other than cash, for the purposes of this act, shall be estimated to be the price which in the opinion of the wealth-tax officer it would fetch if sold in the open market on the valuation date.'
5. It is particularly in the context of section 7 that the controversy arises in this in this reference, since it is ground that the amount lying in the fixed deposit account in the Chartered Bank, Colombo, is an asset which is liable to be subjected to wealth-tax under the Act. The short question which arise in this reference, therefore, is that whether the amount lying in the frozen account of the Chartered Bank, Colombo, is cash for all intents and purposes; and, therefore, the WTO WAS under no obligation to evaluate it. It should be noted that the word cash has not been defined in the legislative dictionary provided in s. 2 of the act. The first question which, therefore, arises is what meaning should be ascribed to the word cash in the context of the valuation in s. 7 of the act. Is it to be interpreted in the widest sense so as to include not only the cash on hand but also hate cash lying in various accounts including the fixed deposit accounts in the bank or should it be interpreted in a restricted sense so as to include the cash on hand and the dash in the current or saving bank account only In other word, the short controversy is whether cash would mean that the amount only which is on hand and readily available and for which no formalities are required to be complied with before the moneys would be available to the assessee concerned. on behalf of the Revenue it has been contained that the Tribunal had committed an error of law in negativing the contention of the Revenue that the moneys lying in the fixed deposit account holder can encash the deposit at his pleasure, though there may be certain formalities which he may be required to comply with; or in some cases, he may not be entitled to claim specified rate of interest which the bank had agreed to pay on the maturity of the rate of the fixed deposits. The learned counsel for the Revenue contended that the word 'cash' occuring in s. 7 is of widest import and the court should not try to restrict its import, since there is no warrant in that behalf. On the other hand, on behalf of the assessee, it has been contended that all the assets which are required to be valued would not be liable to be treated as cash, since that is the very scheme of s. 7; and the least in the present case, since the amount laying in the fixed deposits account is in a frozen account and which is not permitted, according to the foreign exchanges regulations in force in Cyclone, to be repartriated to this country, in any case, without certain restrictive convenants or conditions being attached therefore, such an asset has got to be evaluated. If the asset is to be valued, according to the learned counsel for the assessee, it is ex facie apparent that it cannot be treated as cash. The learned counsel for the Revenue has cited a few decisions to which we will presently refer to impress upon us that there is no warrant to cnstrue the term 'cash' in a restricted manner as has been done by the Tribunal.
6. Having given anxious consideration to all the aspects of the matter which will be indicate immediately hereafter, we are of the opinion that the tribunal was right in the ultimate conclusion which it reached that the amount of the assessee lying in the fixed deposit account in the Chartered Bank, Colomb, cannot be treated as cash; and, therefore, the entire amount as converted in the Indian currency should not be included in the net assessable wealth of the assessee, not for the reasons which it has stated, but for the reasons given hereunder.
7. In the first place, it should be emphasised that the legislative intent as evidenced in the scheme incorporated in s. 7 for the purpose of valuation of assets is what value it would fetch if sold in the open market. In other words, the basic scheme contained in s. 7 is to evaluate every asset with reference to its market value, i.e., the value which is a willing seller will realise from a willing buyer. It is from this formula of the scheme of valuation that cash asset has been excluded. On recognised principles of interpretation of statutes, an exception clause is to be strictly construed. It is therefore, difficult for us to agree with the learned counsel for the Revenue that there is no warrant in the section for giving a restricted meaning to the term 'cash'. On principle as well as on authority, it is settled position in law that an exception clause must be constured strictly and cannot be interpreted so as to nullify or destroy the main provision. (See T. Devadasan v. Union of India, : (1965)IILLJ560SC . An exception has to be confined within its own limits and must be restricted to the matter embraced within it and it is not permissible to extend the meaning of the exception by analogy or by reference to the meaning of the same or similar word, in other cases, so as to include cases which cannot be reasonably brought within the purview of language employed. Having regard to the overall context of the provision, we are not inclined to agree with the learned counsel for the Revenue that the word 'cash' should be given an extended and enlarged meaning since otherwise it would include all sorts of bank accounts including bills of exchange, deposits, cheques, bonds, dividend warants and other securities which can be easily converted into money. Our attention has been invited by the learned counsel for the Revenue to the principle digested in Corpus Juris Secundum. Volume 14. He referred to article 11, at page 14, in which the word 'cash' has been defined. It has been stated that the word 'cash' as a noun is generally used to signify money or its equivalent, including coin or specie, and under certain circumstances, bank notes, drafts bonds or commercial paper easily convertible into money. It is also true as digested in the said article at page 16 that in popular parlance, 'cash' is used to refer not merely to money, but to money in hand, under full control for use in paying obligations and liabilities and has been defined as meaning money at command or in hand, either in current coin or other legal tender, or in bank bills or cheque paid and received as money; money in the treasury. We do not think that the learned counsel for the Revenue was justified in urging on the basis of these observations in Corpus Juris Secundum to persuade us to adopt a wider meaning for the term cash occuring in s. 7 of the Act, because in the ultimate analysis, it would depend in each instance on the context or circumstances of the use of the word cash in a given statute. At page 17 of Corpus Juris Secundum, Vol. 14, this is precisely what has been observed under the caption 'What the term includes' :
'Under particular circumstances, and, of course, depending in each instance on the context or circumstances of its use, it has been held that 'cash' includes generally bank accounts, bills, and deposits bank paper checks city bonds, commercial paper, bonds warrants and other securities easily converted in to cash, corporate stock in to which cash has been converted, interest-bearing notes, liberty bonds and war savings stamps. municipal orders, warrants, or scrips, as well as payments in currency Under other circumstances however, the word has been held not to include bank notes bills receivable checks check returned unpaid even though paid several days thereafter, foreign bills gold dust goods government bonds, insurance premiums in course of collection even though they be collected within ninety days,......... promissory notes real estate in absence of a manifest intent that it was used for that purpose, treasury notes or war currency of the Confederate States.'
8. We do not think that the aforesaid paragraph to which our attention has been invited would effectively assist the cause of the Revenue. As observed in the paragraph extracted above, it would depend in each instance on the context or circumstances of the us of the word in a particular statute. We have, therefore, to remind ourselves that an exception is made to the very formula which has been prescribed by the Legislature for the purpose of evaluation asset. The exception has been made in respect of cash assets. The Legislative intent is, therefore, manifestly clear that that asset which does not require valuation, elaborate or otherwise, would be generally entitled to be treated as cash. If an asset which may be in the nature of deposits in a bank is subjected to certain restrictive covenants, it has got to be evaluated. An asset which is subjected to encumbrances cannot be evaluated cannot be evaluated on its face value since the price which such asset would fetch, if sold in the open market, would not be the same; and in order to arrive at a correct valuation such asset, the only method of evaluating it is to take the valuation of the asset less the valuation of encumbrance thereon. (See CWT v. Smt.Shirinbanno : 102ITR735(Guj) ). Similarly, in a case of leasehold interest in land, the burden or disadvantage attaching to the leasehold interest had to be duly discounted in estimating the price which the leasehold interst would fetch. (See CWT v. Sikand : 107ITR922(SC) ). If,therefore, in a given case,certain restrictive conditions are attached to a fixed deposit account,it would not be possible to evaluate it on its face value. The valuation has to be made according to correct legal principles by reducing the valuation of such asset by deducting the estimated value of disadvantages of restrictions attached to it. If, therefore, as contended by the learned counsel for the Revenue, the monkeys lying in the fixed deposit account in a bank are to be treated for all purposes as cash, without having regard to the restrictions attached to them, it would not be a proper valuation according to the scheme of the Act. In the very nature of the scheme prescribed by the Legislature in s. 7 of the Act, we have got to give a restricted meaning to the term 'cash' for two reasons as indicated above, viz., it is excepted from the formula of evaluation contained in s. 7, and, secondly, because the interpretation advanced on behalf of the Revenue would defeat the very purpose of the scheme of evaluation. the learned counsel for the Revenue, in support of his contention, invited our attention to a decision of the Chancery division, In re Stonham, Lloyds Bank Ltd. v. Maynard  1 WLR 238 (Ch D), where the question which arose before the court was 'What is the meaning to be given to the expression used in the will of the testatrix, viz., cash in Lloyds Bank and 'Whether that expression is sufficient to pass money held in a deposit account ?' Wilberforce J. while disposing of the summons taken out by the executors laid down the case law on the point and summed up the position as under (p. 245) :
'The cases seem to establish this : (1) 'Money' can (albeit by a process of extension justified by the context) include money on deposit; so can, rather more easily, 'money in the bank', (2) 'Ready money' or 'ready money in the bank' does not normally pass money for which a substantial period of notice is required. As regards 'cash', the question would seem to be whether the testator is using it in the sense of ready money or merely as synonymous with 'money' without any implication of readiness, and in the normal case the conclusion would probably be the former.'
9. The learned judge having regard to all the circumstances, therefore, concluded that in using the expression 'cash in Lloyds Bank' the testatrix, who had remitted pounds 500 from her fixed deposit account to her current account without following any formality, must have intends to dispost of all money to her credit on either account. As observed above, the word 'cash' has to be interpreted in the context in which it occurs; and the decision of the Chancery Division pressed into service on behalf of the Revenue by its learned counsel turns more on the facts of the case particularly the conduct of the testatrix. However, the passage which we have extracted and set out above indicates that in a normal case, the conclusion would be that when the word 'cash' is used, it would mean ready money. We are, however, not relying upon this decision for the construction which has appealed to us. We have tried to construe the word 'cash' in the context in which it is occurring.
10. In the context of the scheme contained in s. 7, for purposes of valuation and also having regard to the legislative intent as evidenced in the form of return to be made by an assessee for the purpose of computation of wealth-tax under the act, we are of the opinion that the term 'cash' should be construed as 'ready money'. It should be emphasised that the Legislature had in its mind a clear distinction between ready money including cash on hand as well as cash in bank, and deposits, debentures, securities and shares which otherwise depending in a given context can be successfully clubbed together under the broad head of cash or money. In this connection, it is profitable to refer shortly to the form of return of net wealth which an assessee is required to submit under sub. (1) or subs-s. (2) of s. 14 of the Act. Section B in Part I of the return requires particulars to be stated in respect of the movable property of an assessee. Such particulars are required to be given as per annexure V/VI to the return. Annexure V is a statement of movable property located in India and held as assets of business; while annexure VI is a statement of movable property (non-business assets) located in India. Serial No. 9 in annexure V describes assets in the nature of cash in hand and at bank; while serial No.13 in annexure VI describes assets in nature of moneys, inter alia, moneys in hands or in banks (other than those mentioned in serial No.7). If we look to serial No.7 of annexure VI, it describes assets in the nature of deposits in banks including co-operative banks, etc., referred to in s. 5(1)(xxvi) and compulsory deposits made under the Compulsory Deposits Scheme (Income-tax Payers) Act, 1974. Serial No.9 in annexure VI describes assets in the nature of shares in a co-operative housing society, while serial No.10 describes assets in the nature of deposits with a co-operative society, other than a co-operative bank or a co-operative housing society. Serial no. 12 of Form II describes assets in the nature of securities, bonds and debentures of local authorities and shares, debentures or bonds of companies. It would be thus clear that the Legislature has made a clear distinction between cash/moneys in hand or in banks as contradistinguished from deposits, shares, securities, bonds and debentures. This, in our opinion, is an additional reason for giving a restricted meaning to the term 'cash' as used in s. 7 of the Act. we may again remind ourselves that we are dealing with the construction of an exception in a provision relating to valuation of assect; and in given ciecumstances, deposit, share, securities, debentures or bonds may not carry or enjoy the same value which they carry ex facie. we are, therefore, of the opinion that the word 'cash' whether in hand or in the bank would mean money which are readily available and not any moneys without any implication of readiness. The learned counsel for the Revenue, however, invited our attention to a decision of the Madhya pradesh High Court in Sardar C.S. Angre v. CWT : 69ITR336(MP) , where the court was concerned with the question as to whether the annual installments of compensation payable for resumption of a jagir under the Madhya Bharat Abolition of Jagirs Act, 1951, and falling due after valuation date should be included in the net wealth of the Jagirdar for the purpose of assessment to wealth-tax. The Appellate Tribunal had referred two questions for the advice of the court. Question No. 2 was in the following terms :
'Whether the market value as on the valuation date of the installments due to be paid under the provisions of the Madhya Bharat Abolition of Jagir acts after the valuation date is liable to be included in the total wealth of the assessee ?'
11. The Madhya Pradesh High Court, speaking through Dixit C.J. (as he then was), considered the relevant provisions of the Madhya Bharat Abolition of Jagirs Act, 1951, and was of the opinion that the compensation amount became due to the jagirdar under s. 8(2) of the said Act from the date of resumption, though the compensation amount was made payable not on the date of resumption of jagir, but in maximum 10 annual installments; and, therefore, a right arose in favour of the assessee to receive compensation on the date of resumption itself; and since the entire amount was payable on the same date of resumption till the date of payment at a certain rate was made. The court, therefore, concluded that though the payment of compensation was differed over a period of ten years, the liability to pay arose in praesenti; and, therefore, it was a debt owed to the assessee by reason of the present obligation and must, therefore, be treated as an asset. The court, thereafter, held that the WTO was justified in including the amount of installment in the computation of net wealth of the assessee. The court, thereafter, observed as under (p.342 of 69 ITR) :
'As this asset of unpaid compensation installments is a 'cash asset', the question of determining its market value clearly does not arise. Section 7 of the Act speaks of the determination of the market value of any asset other than cash. Cash is money and its value can be no other than the value of that money in legal currency. We may add that the view that compensation amount payable in future in certain installments by reason of a present obligation is an asset for the purpose of wealth-tax has also been take by the Andhra Pradesh High Court in..... and by the Patna High Court in......
For the forgoing reasons, our answer to the first question is in the affirmative. We answer the second question by saying that the amount of installments payable to the assessee under the Jagirs Act after the valuation date has to be included in the computation of the total wealth of the assessee.'
12. We have not been able to appreciate how this decision can be of any assistance to the Revenue particularly having regard to the manner in which the relevant question has been answered by the court. The question which has been set out above postulates whether the market value as on the valuation date of installments payable subsequent to the valuation date is liable to be included in the total wealth of the assessee. The court answered it by saying that they are includible in the net wealth of the assessee; but the court did not answer the question whether the market value as on the valuation date of the said installments was to be treated as value of the asset for the purpose of the computation of the liability. In other words, the question envisages the valuation of the subsequent installments as on the valuation date. Apart from this, the question whether unpaid compensation amount should be considered as cash was not directly in issue before the court. We, therefore, do not think that this decision can be of any assistance to the cause of the Revenue except to the extent of the passing reference observation which has been made that unpaid compensation installments is a cash asset and, therefore, the question of determining its market value does not arise. In any case, with respect to the learned judges, we do not think that the amount of money which is not ready available can be held to be cash asset.
13. Next decision to which the learned counsel for the Revenue invited our attention is In re Wellsted's 'Will Trusts : Wellsted v. Hanson  Ch 296 :  1 All ER 577 (CA), where the question was what are the powers of trustees for sale in relation to land under s. 28(1) of the Law Property Act, 1925, and when the trustees for sale have made investment of the proceeds of sale of land, whether they can, so long as the proceeds of sale can be traced, apply the raised amount of the investments in the purchase of land In that context, Lord Green M.R., in his opinion, observed as under (p.584) :
'...but it still leaves the separate question in regard to the investment which the trustee already hold. Those investments, historically, are derived from earlier sales of land, and it might be said that where trustees for sale have sold the land in pursuance of the directions of the settlement and have invested the proceeds, the whole of the trust for sale has been carried out, and, therefore, the powers given by s.28, which are, so to speak temporary powers pending sale, cannot be applied. I do not think that s. 28 is to be limited in that way. Verbally there is, indeed, something to be said for that view, for the reason that the powers conferred are powers in relation to proceeds of sale, and it is said that once the proceeds of sale have been received and have been invested in, let me say, War Loan, they cease to be 'proceeds of sale' for the purpose of s. 28, and are then properly to be described, not as proceeds of sale but as investments made out of the process of sale. Therefore, it is said that the power to invest in land must be limited in application to what in strictness can be called 'proceeds of sale', that is to say, cash. I am not quite clear how far the limitation is said to go. 'Cash', of course, is a loose expression. Nowadays it does not mean mere cash in one's pocket, but it includes a chose-a-action like money on current or deposit account at the bank. At some stage, according to the argument for the infant defendant, what starts as money received from a purchaser as the proceeds of a sale looses the character of proceeds of sale, and acquires a different character, namely, that of an investment; and Mr. Jennings quite logically accepted as the test, which he said must be a test to be applied upon the facts of each particular case, whether an investment had been made or not. To illustrate the idea that he had in mind, I suppose if the money was paid into a bank or put on deposit it would still retain its quality of 'proceeds of sale' but if the trustee had gone into the market and bought what was intended to be an investment, then that would not be 'the proceeds of sale, and it could not be sold in order that the proceeds might be applied in investments in land.'
14. The observations in the above passage which we have emphasised lay down a popular parlance of the word 'cash'. But as observed above, what meanings should be ascribed to the word 'cash' would depend upon the context, the set up and the collocation of the word and the legislative intent. We do not think that this decision can be of any assistance to the Revenue for the purpose of persuading us to adopt a wider meaning for the word 'cash'.
15. Next decision to which the learned counsel for the Revenue invited our attention is that of the Madras High Court in Abdul Rahman v. CWT : 117ITR570(Mad) , where the WTO converted the wealth shown by the assessee which he owned in Ceylon in Ceylon currency into Indian currency at the official rate of exchange and included the amount in the net wealth of the assessee rejecting the claim of the assessee that only the realisable and remittable value of the foreign wealth should be taken instead of adopting the official rate of exchange, and also his further claim that the official rate of exchange was often not realistic and did not represent the real foreign exchange rate and, hence, only a real foreign exchange value should be adopted for the purpose of assessment of wealth. The view of the WTO was confirmed by the AAC as well as by the Tribunal. On a reference, the Madras High Court held that there is nothing in s. 7(1) of the W.T. Act which indicates that only the remittable value of money in legal currency would be that value which is equivalent at the official rate of exchange, it would be open to an assessee to prove that the official rate of exchange does not reflect the realistic exchange value or that it was not fixed with reference to convertibility of the currency and that since the departmental authorities adopted the official rate of exchange as a principle of law and not on the basis of facts, it was open to the assessee to prove that the official rate of exchange was not the real exchange rate. We are of the opinion that this decision permits, even in case of a cash asset lying in a foreign country, the assessee to prove that the official rate of exchange was not the real exchange rate; and, therefore, it did not represent the real exchange rate; and, therefore, it did not represent the real value of the asset. In other words, even in respect of cash asset lying in a foreign country, it is open to the assessee to prove the valuation by leading proper evidence in that behalf.
16. In that view of the matter, therefore, we are of the opinion that the amount lying in fixed deposit in the Chartered Bank, Colombo, in the assessee's account cannot be said to be cash, because in the first place, it was not ready money available for the use of the assessee, and in any view of the matter, because certain restricitve convenants were attached to the said fixed deposit account which was frozen under the foreign exchange regulations in force for the time being prescribed by the Government of Ceylon and, therefore, inclusion of the said amount in the valuation of the assets of the assessee will have to be deleted. We, therefore, answer the question referred to us in the affirmative, i.e., in favour of the assessee and against the Revenue. The Commissioner shall pay the costs of this reference to the assessee.