Sabyasachi Mukharji, J.
1. This reference relates to a question involved in the wealth-tax assessment for the assessment years 1964-65 and 1965-66. The relevant valuation dates were 31st March, 1964, and 31st March, 1965, respectively. The assessee had made a gift of Rs. 1,00,011 to her minor daughter, Kumari Manjushree Birla, on the 7th of October, 1959. Applying the provisions of Section 4(1)(a)(iv) of the Wealth-tax Act, 1957, the Wealth-tax Officer had included the said amount in the net wealth of the assessee for the said two years. The assessee preferred an appeal before the Appellate Assistant Commissioner. It was contended that the sum of Rs. 1,00,011 was exempt under the proviso to Section 4(1)(a) introduced by the Act 46 of 1964. The Appellate Assistant Commissioner negatived this contention and upheld the order of the Income-tax Officer on this point. The assessee preferred an appeal before the Tribunal contending that the sum was exempt from the levy of wealth-tax under the proviso to Section 4(1)(a) because she had paid gift-tax with reference to the said amount. It was contended on behalf of the revenue on the other hand that the proviso would only apply to a transaction of gift made in the previous years relevant to 1965-66 and subsequently. The Tribunal held that the proper and reasonable construction of the proviso was that so long as the gift was chargeable to or exempt from gift-tax to that extent Section 4(1)(a) ceased to have any operation for attributing the statutory fiction embodied in it. As at the relevant time the gift was chargeable to tax the exemption was to operate from the assessment year commencing after 31st March, 1964, i.e., 1964-65. Therefore, to that extent, there would be exclusion under Section 4(1)(a).
2. Under the circumstances aforesaid under Section 27(1) of the Wealth-tax Act, 1957, the following question has been referred to this court:
'Whether, on the facts and circumstances of the case, and on a proper interpretation of Section 4(1)(a) of the Wealth-tax Act as amended by the Wealth-tax (Amendment) Act, 1964 (46 of 1964), the sum of Rs. 1,00,011 gifted by the assessee to her minor daughter would be included in computing her net wealth ?'
3. The question, therefore, is whether in respect of gift made in this case which was on the 7th October, 1959, and which had been subjected to the Gift-tax Act, 1958, the assessee was exempt in view of the proviso.
4. It is a question of first impression.
5. The proviso is unhappily worded.
6. Counsel for the assessee contended that the expression 'is chargeable' was descriptive of being charged and not indicative of the period when the charge was imposed or levied. In this connection it may be relevant to mention that since the passing of the Finance Act 2 of 1971, with effect from 1st of April, 1972, the sub-clause is as under :
'By a person or association of persons to whom such assets have been transferred by the individual otherwise than under an irrevocable transfer,
7. whether the assets referred to in any of the sub-clauses aforesaid are held in the form in which they were transferred or otherwise:
Provided that where the transfer of such assets or any part thereof is either chargeable to gift-tax under the Gift-tax Act, 1958 (18 of 1958), or is not chargeable under Section 5 of that Act, for any assessment year commencing after the 31st day of March, 1964, but before the 1st day of April, 1972, the value of such assets or part thereof, as the case may be, shall not be included in computing the net wealth of the individual.'
8. Having regard to the expression 'is chargeable' in conjunction with the provisions of the Gift-tax Act, 1958, it appears to us that the expression 'for any assessment year commencing after 31st March, 1964' occurring in the proviso indicates that the transfer of asset must be chargeable to gift-tax under the provisions of the Gift-tax Act, 1958, for any assessment commencing after 31st of March, 1964, or where the transfer is not chargeable under Section 5 of that Act, then for any assessment year commencing after 31st of March, 1964, the proviso would apply. The reason for our coming to this conclusion is that the proviso was really dealing with the effect of the assessment to wealth-tax and what is being dealt with in the proviso is that certain transfers which would, subsequent to the proviso coming into effect, be eliminated from the provision of the substantive part of the section. It is true that the location of the expression 'for any assessment year commencing after 31st of March, 1964' is not quite appropriate. The punctuation mark is also suggestive of contrary conclusion but, having regard to the, provisions of the Gift-tax Act, 1958, and having regard to the purposes for which the proviso came into effect we are of the opinion that the proviso really exempted transfer of assets which were chargeable for any assessment year commencing after 31st of March, 1964, or where the transfer was not chargeable under Section 5 of the Act for any assessment year commencing after 31st of March, 1964. This construction is in consonance with the later amendment made, though that is not a relevant factor.
9. In the aforesaid view of the matter we are of the opinion that the Tribunal was not correct on the interpretation of the proviso. The question referred to this court is answered in the affirmative and in favour of therevenue. In the facts and circumstances of the case each party will pay and bear its own costs.
10. I agree.