Compulsory Deposit Scheme balances treated as annuity and excluded from wealth-tax assets under the exemption rule.

Amounts credited under the Compulsory Deposit Scheme (Income-tax Payers) Act, 1974 were treated as a right to receive fixed, predetermined repayments in five equal instalments with interest after the prescribed period. That repayment structure satisfied the legal description of an annuity under wealth-tax jurisprudence, so the balance standing to the credit of the petitioners fell within the exemption for a right to any annuity under the Wealth-tax Act, 1957. The amount was therefore not taxable as an asset for wealth-tax purposes.

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Issues: Whether the amount standing to the credit of the petitioners under the Compulsory Deposit Scheme (Income-tax Payers) Act, 1974 was a right to an annuity and therefore excluded from the definition of assets under the Wealth-tax Act, 1957.

Analysis: The repayment under the Compulsory Deposit Scheme was statutorily payable in five equal instalments with interest after the prescribed period. The payment was fixed and predetermined, answering the description of an annuity as understood in the governing wealth-tax jurisprudence. Since the relevant exemption in the Wealth-tax Act excludes a right to any annuity, the balance standing to the petitioners' credit could not be treated as a taxable wealth asset.

Conclusion: The amount deposited under the Compulsory Deposit Scheme was held to be an annuity within the meaning of the Wealth-tax Act and was entitled to exemption from wealth-tax.

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