Wealth-tax exemption for returning persons of Indian origin extends to earlier returnees; asset use in India is the key test.

Section 5(1)(xxxiii) of the Wealth-tax Act was construed as not confined to an assessee who returned to India during the relevant previous year. The exemption was held to extend to a person of Indian origin who had returned to India before the provision came into force, because the clause contained no limiting language tied to the year of return. The relevant consideration was the bringing of assets into India and their use in India, and for earlier returnees the exemption period commenced from the year next following the date the provision became operative. The exemption was therefore available to the assessee.

---

---

Issues: Whether the exemption under section 5(1)(xxxiii) of the Wealth-tax Act, 1957 was confined only to an assessee who returned to India during the previous year relevant to the assessment year, or also extended to a person of Indian origin who had returned to India before the provision came into force.

Analysis: The exemption clause contained no language restricting its operation only to persons who returned to India during the relevant previous year. The provision was introduced to grant relief in respect of moneys of an assessee of Indian origin who had already returned to India and the assets brought into India or acquired out of such moneys. The material consideration was not merely the date of return, but the bringing of assets into India and their use in India. For persons who had returned before the clause came into force, the exemption period had to commence from the year next following the date on which the provision became operative.

Conclusion: The exemption was held available to the assessee. The question was answered in favour of the assessee and against the Revenue.

---