Compulsory deposit is not an annuity for wealth-tax exemption, as it is treated as an asset, not periodic income.

A compulsory deposit under the Compulsory Deposit Scheme (Income-tax Payers) Act, 1974 is not an annuity for purposes of section 2(e)(2)(ii) of the Wealth-tax Act, 1957. Because the Wealth-tax Act did not define "annuity", the term was given its ordinary legal meaning as a right to fixed periodic payments. The scheme required a deposit to be repaid later with interest, and section 7A treated it as a deposit for exemption purposes rather than as an annuity. The claim to exemption therefore failed, and the amount was treated as an asset.

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Issues: Whether a compulsory deposit under the Compulsory Deposit Scheme (Income-tax Payers) Act, 1974 is an annuity exempt under section 2(e)(2)(ii) of the Wealth-tax Act, 1957.

Analysis: The expression "annuity" was not defined in the Wealth-tax Act, 1957 and was therefore construed according to its ordinary legal meaning as a right to receive fixed periodic payments. The compulsory deposit scheme required the taxpayer to make a deposit to be returned after a period with interest, and section 7A of the Compulsory Deposit Scheme (Income-tax Payers) Act, 1974 treated such deposit as a deposit with a banking company for the purposes of exemption under section 5 of the Wealth-tax Act, 1957. On that basis, the deposit was regarded as an asset rather than a payment falling within the concept of annuity.

Conclusion: A compulsory deposit under the scheme is not an annuity within section 2(e)(2)(ii) of the Wealth-tax Act, 1957, and the exemption claim fails.

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