Retrospective wealth-tax amendment and jewellery inclusion shaped rectification under the Wealth-tax Act for relevant years.

Rectification under section 35 of the Wealth-tax Act was considered in light of the retrospective amendment to section 5(1)(viii) by the Finance (No. 2) Act, 1971, to determine whether jewellery could be brought into the assessees' net wealth for the relevant assessment years. Following J. M. Bhatia v. J. M. Shah, the amendment was treated as permitting rectification, and the earlier omission to include jewellery was not regarded as an error apparent from the record. The later view in CWT v. Smt. Godavaribai R. Podar was also noted, limiting inclusion to ornaments studded with precious stones. Inclusion was therefore confined to items falling within the statutory meaning of jewellery for the relevant years.

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Issues: Whether rectification under section 35 of the Wealth-tax Act, 1957, could be invoked to give effect to the retrospective amendment of section 5(1)(viii) by the Finance (No. 2) Act, 1971, so as to include jewellery in the assessees' net wealth for the relevant assessment years.

Analysis: The question was answered by following the Supreme Court decision in J. M. Bhatia, A.A.C. of Wealth-tax v. J. M. Shah, under which the amendment justified rectification and the omission to include jewellery was not to be treated as an error apparent from the record. At the same time, the Court noted the later view in CWT v. Smt. Godavaribai R. Podar that only ornaments studded with precious stones were includible, so the Tribunal was directed to confine inclusion to items falling within the meaning of 'jewellery' as applicable to the relevant years.

Conclusion: The issue was answered in the negative and in favour of the Revenue, while directing inclusion only of those ornaments or jewellery items that properly fell within the statutory meaning of jewellery for the relevant assessment years.

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