COMMISSIONER OF WEALTH TAX VS BHASKAR MITTER, 1994 PTD-CALCUTTA-HIGH-COURT-INDIA 413 (1991)

(a) Wealth tax---

----Exemption---Securities---Ceiling on exemption---Raising of ceiling on assets referred to in S.5(1)(xv) & S.5(1)(xvi) of Indian Wealth Tax Act, 1957-- Ceiling can be raised only if such assets exceed Rs.1,50,000---Indian Wealth Tax Act, 1957, Ss.5(1)(xv), (xvi), 5(1-A).

It is expressly provided in section 5(1A) that nothing contained in subsection (1) shall operate to exclude from the net wealth of the assessee any assets referred to in the clauses mentioned in that section to the extent the value thereof exceeds, in the aggregate, a sum of Rs.1,50,000 at the material time. Deposits under any scheme framed by the Government in clause (xv) and deposit certificates in item (xvi) of section 5(1) are two of the items referred to in section 5(1-A). The plain meaning of section 5(1-A), therefore, is that in respect of the assets which are speed in section 5(1-h), exemption from wealth-tax is permissible only to the limit of Rs.1,50,000 and anything in excess of the value of Rs.1,50,000 will not be entitled to exemption. The proviso to section 5(1-A) contemplates the conditions, (1) that the assets referred to in clause (xv) and clause (xvi) must be owned by the assessee continuously from a date prior to the 1st day of March, 1970, and (2) the value of those assets must exceed the limit of Rs.1,50,000. Having regard to the opening words of the proviso, the question of raising the limit would arise only in a case where the value of the assets referred to in clauses (xv) and (xvi) of section 5(1) exceeds Rs.1,50,000 and where such ,value does not exceed Rs.1,50,000, the question of raising the limit under the proviso does not arise at all.

(b) Wealth tax---

----Exemption---Residential house---Life interest in residential house-- Entitled to exemption---Indian Wealth Tax Act, 1957, S.5(1)(iv).

Under section 33 of the Estate Duty Act, 1953, no estate duty is payable in respect of several kinds of properties "belonging to" the deceased enumerated therein. One of such properties is one house or part thereof exclusively used by the deceased for his residence to the extent specified in clause (n) of section 33(1). It was held in CED v. Estate of Late Sanka Simhachalam (1975) 99 ITR 370 (AP), that the life interest in the residential house was to be treated as an asset belonging to the assessee. Therefore, there was no reason to deny exemption from estate duty in respect of such an asset under section 33(1). The provisions of the two Acts, the Estate Duty Act and the Wealth Tax Act, in the matter are in pari materia. Hence the life interest of an assessee in a residential house is entitled to exemption under section 5(1)(iv) of the Wealth Tax Act, 1957.

CED v. Estate of Late Sanka Simhachalam (1975) 99 ITR 370 (AP) and CED v. Jyotirmoy Raha (1978) 112 ITR 969 (Cal.) fol.

(c) Interpretation of statutes---

.... Same expression in different enactments must be given same meaning.

In fiscal statutes, unless the context otherwise warrants, same expression should be assigned same meaning occurring in different enactments where the colour, content and context of such statutes are same or similar.

CWT v. H.H. Sethu Parvathi Bayi (1979) 116 ITR 135 (Ker.); CWT v. H.H. Sari Rama Varma Maharaja of Travancore (1988) 169 ITR 273 (Ker.); K.S. Ayodhyanath v. CWT (1983) 141 ITR 309 (Kar.); K.S. Digvijaysiniji v. CWT (1983) 141 ITR 313 (Guj.) and Saroja Ravindran v. CWT (1989) 177 ITR 302 (Mad.) fol.

B.K. Bagchi and S.K. Chakraborty for the Commissioner.

Ranen Dutta: Amicus curiae.

JUDGMENT

AJIT K. SENGUPTA, J.--- In this reference under section 27(1) of the Wealth Tax Act, 1957, for the assessment years 1972-73 to 1975-76, the following questions of law have been referred to this Court:--

(1) Whether, on the facts and in the circumstances of the case, under the proviso to section 5(1-A), the raising of the exemption limit beyond Rs.1,50,000 could be made only if the assets referred to in sections 5(1)(xv) and 5(1)(xvi) of the Wealth Tax Act, 1957, exceed Rs.1,50,000?

(2) Whether on the facts and in the circumstances of the case, the house property at 7/1, Queens Park or a part thereof can be said to belong to the assessee within the meaning of section 5(1)(iv) of the Wealth Tax Act, 1957, where the assessee, admittedly, has only a life interest therein?

Shortly stated, the facts are that the assessee, an individual, held Government securities on the respective valuation dates as follows:--

Apart from the aforesaid securities, the assessee also held shares of various companies. Exemption to the extent of Rs.1,50,000 was granted by the Wealth Tax Officer in respect of the various shares. In addition to the above exemption, the assessee wanted further exemption with regard to the aforesaid Government securities in terms of clauses (xv) of (xvi) of subsection (1) of section 5 of the Wealth Tax Act, 1957. The Wealth Tax Officer did not allow the assessee's aforementioned claim as in his opinion, the securities in question were covered by the overall limit of Rs.1,50,000 indicated in subsection (1-A) of section 5 of the Wealth Tax Act, 1957, and that exemption in terms of clauses (xv) and (xvi) of subsection (1) of section 5 was not over and above the said ceiling limit of Rs.1,50,000 indicated in subsection (1-A) of section 5. The Wealth Tax Officer also expressed the opinion that the provision of subsection (1) of section 5 of the Wealth Tax Act, 1957, relied upon by the assessee was not attracted in the present case. Aggrieved by these assessments, the assessee bought the matter by way of appeals before the Appellate Assistant Commissioner who, following the decision of the Tribunal in the case of the assessee for the assessment year 1972-73, upheld the aforesaid claims of the assessee for the year under consideration. The Revenue, thereupon, appealed to the Tribunal against the aforesaid consolidated order of the Appellate Assistant Commissioner. Inasmuch as the facts for the year under consideration as well as the rival submissions of both the sides were identical to those, which were the subject-matter of the decision of the Tribunal for the assessment year 1972-73, the Tribunal confirmed the order of the Appellate Assistant Commissioner for these years also. The Tribunal held that if the assets include assets referred to in clause (xv) or clause (xvi), they are exempt over and above the overall limit of Rs.1,50,000.

The assessee had

transferred his property situated at No.7/1, Queens Park to the trustees of the trust, which was brought into being by him, vide trust deed executed on August 28, 1951. The said trust was a revocable one. Under the said deed, the assessee, alongwith his wife and three sons, had equal rights of residence in the said property during his lifetime. The Wealth Tax Officer on these facts held that the assessee had a life interest in the said property and, accordingly, he included the market value of the said life interest in the net wealth of the assessee for each of the years under consideration. The assessee claimed that he was entitled to the exemption in terms of clause (iv) of subsection (1) of section 5 of the Wealth Tax Act, 1957, with regard to the aforesaid life interest in the property. This claim was, however, negatived by the Wealth Tax Officer. The assessee, thereupon, appealed to the Appellate Assistant Commissioner who accepted the assessee's claim in view of the decision of this Court in the case of CED v. Jyotirmoy Raha (1978) 112 ITR 969. The Revenue felt aggrieved by the aforesaid order of the Appellate Assistant Commissioner and appealed to the Tribunal. It was contended on behalf of the Revenue that the reliance on the case of Jyotirmoy Raha (1978) 112 ITR 969 (Cal.) by the Appellate Assistant Commissioner was misplaced inasmuch as the said decision was rendered under the Estate Duty Act and not under the Wealth Tax Act. It was urged by the Revenue that the Tribunal, in one of the matters, decided that the ratio of the aforesaid decision of this Court in the case of Jyotirmoy Raha (1978? 112 ITR 969, had no application to the cases under the Wealth Tax Act. On behalf of the assessee, the above submissions were resisted and reliance was placed on the aforesaid decision of this Court. Apart from it, reference was made to the decision of the Andhra Pradesh High Court in the case of CED v. Estate of Late Sanka Simhachalam (1975) 99 ITR 370. The Tribunal, after considering the provisions of clause (iv) of subsection (1) of section 5 of the Wealth Tax Act, 1957, and, after comparing them with the analogous provision contained in clause (n) of subsection (1) of section 33 of the Estate Duty Act, held that the ratio of the aforesaid decision applied to the facts of the present case and, therefore, the assessee was entitled to relief under clause (iv) of subsection (1) of section 5. The observations of the Tribunal on this point are as follows-

"In view of the aforesaid interpretation given to the word `belonging' in section 33(1) of the Estate Duty Act, 1953, which we, in view of the definition of the expression `asset' in section 2(e) of the Act, are of the considered view that the word `belonging' in section 5(1)(iv) of the Act signifies even possession of an interest less than that of full ownership like the life interest of the assessee in the present case. In that view of the matter, we, respectfully following the aforesaid decisions of the Andhra Pradesh and the Calcutta High Courts, hold that the house in which the assessee has a life interest is one belonging to the assessee for the purpose of section 5(1)(iv) of the Act."

At the hearing before us, Mr. Bagchi for the Revenue fairly submitted that the trend of the judicial decisions is against the contentions raised by the Revenue before the Tribunal. Since none appeared for the assessee, at our request, Mr. Ranen Dutta, learned Advocate, assisted the Court and brought to .our attention several decisions on the controversies involved in this reference.

We will now take up the first question.

Section 5(1-A) provided as follows:--

"(1-A) Nothing contained in subsection (1) shall operate to exclude from the net wealth of the assessee any assets referred to in clauses (iva), (xv), (xvi), (xxii), (xiii), (xxiv), (xxv), (xxvi), (xxvii), (xviii), (xxix) (xxxi) and (xxxii) (not being deposits under the Post Office Savings Bank (Cumulative Time Deposits) Rules, 1959), to the extent the value thereof exceeds, in the aggregate, a sum of one hundred and fifty thousand rupees:

Provided that where the assets include any assets referred to in clause (xv) or clause (xvi) not being deposits under the Post Office Savings Bank (Cumulative Time Deposits) Rules, 1959, which have been owned by the assessee continuously from a date prior to the 1st day of March, 1970, and the value of the assets so included exceeds the limit of one hundred and fifty thousand rupees by any amount, such limit shall be raised by the said amount."

Thus, it is expressly provided in section 5(1-A) that nothing contained in subsection (1) shall operate to exclude from the net wealth of the assessee any assets referred to in the clauses mentioned in that section to the extent the value thereof exceeds, in the aggregate, a sum of Rs.1,50,000 at the material time. Deposit under any scheme framed by the Government in clause (xv) dud deposit certificates in item (xvi) of section 5(1) are two of the items referred to in section 5(1-A). The plain meaning of section 5(1-A) of the Act, therefore, is that, in respect of the assets which are specified in section 5(1-A), exemption from wealth-tax is permissible only to the limit of Rs.1,50,000 and anything in excess of the value of Rs.1,50,000 will not be entitled to exemption. The proviso to section 5(1-A) contemplates the conditions: (1) that the assets referred to in clause (xv) and clause (xvi) must be owned by the assessee continuously from a date prior to the first day of March, 1970 and (2) the value of those assets must exceed the limit of Rs.1,50,000. Having regard to the opening words of the proviso, the question of raising the limit would arise only in a case where the value of the assets referred to in clauses (xv) `and (xvi) of section 5(1) exceeds Rs.1,50,000 and where such value does not exceed Rs.1,50,000, the question of raising the limit under the proviso does not arise at all.

This also the view taken by the Kerala High Court in CWT v. Sethu Parvathi Bayi (H.H.) (1979) 116 ITR 135 and CWT v. H.H. Sri Rama Varma Maharaja of Travancore (1988) 169 ITR 273); the Karnataka High Court in Ayodhyanath (K.S.) v. CWT (1983) 141 ITR 309; the Gujarat High Court in Digvijaysinhji (K.S.) v. CWT (1983) 141 TTR 313 and the Madras High Court Saroja Ravindran v. CWT (1989) 177 ITR 302).

For the foregoing reasons, we answer the first question in the affirmative and in favour of the Revenue.

So far as the second question is concerned, it is now concluded by the two decisions referred to by the Tribunal. The first decision is of the Andhra Pradesh High Court in CED v. Estate of Late Sanka Simhachalam (1975) 99 ITR 370. In that case, the Court was concerned with the interpretation of the words `belonging to' used in section 33(1) of the Estate Duty Act. In that case, the deceased had executed a settlement retaining life interest in the residential house. Since he had only a life interest in the house, the estate duty authorities took the view that the house did not `belong' to the deceased and consequently, section 33(1) did not apply to exempt the house from estate duty. But the Andhra Pradesh High Court held that the house property in which the deceased had a life interest and in which the deceased resided at the time of his death was not liable to be included in the estate of the deceased for estate duty.

This decision was followed by a Division Bench of this Court in CED v. Jyotirmoy Raha (1978) 112 ITR 969. There also, the question of exemption under section 33(1)(n) of the Estate Duty Act came up for consideration. In that case also, the deceased had a life interest. This Court held that exemption under section 33(1)(n) of the Act was available in respect of the value of that portion of the property which was used by the deceased for her residence and which was bequeathed and demised to her by her husband for her life with a direction that on her death, the same should go to her two sons in equal shares.

Under section 2(m) of the Act, an asset can be included in the wealth- tax assessment, if it belongs to the assessee. If a life interest is treated as such an asset belonging to the assessee and included in the assessment, there is no reason why such asset will not be entitled to exemption provided in respect of any such asset. In Jyotirmoy Raha's case (1978) 112 ITR 969 (Cal.), section 33(1)(n) came up for consideration. Under section 33, no estate duty is payable in respect of several kinds of properties `belonging to' the deceased enumerated therein. One of such properties is one house or part thereof exclusively used by the deceased for his residence to the extent speed in clause (n) of section 33(1). Life interest in the residential house was treated as an asset belonging to the assessee. In our view, there is no reason for different treatment of such interest for wealth-tax, the provisions of the two Acts, the Wealth Tax Act and the Estate Duty Act, in the matter, being in pari materia. In fiscal statutes, unless the context otherwise warrants, the same expression should be assigned same meaning occurring in different enactments where the colour, content and context of such statutes are the same or similar.

Following the aforesaid decisions, we answer the second question in the affirmative and in favour of the assessee.

There will be no order as to costs,

SHYAMAL KUMAR SEN, J.--- I agree,

M.B.A./39/T.F.Order accordingly.