Prospective definition of jewellery under wealth-tax law excluded gold ornaments from pre-1972 assessment years.

The extended meaning of "jewellery" inserted by Explanation I to section 5(1)(viii) of the Wealth-tax Act, 1957 was treated as prospective and applicable only from assessment year 1972-73 onwards. For assessment year 1963-64, gold and silver ornaments were therefore not brought within the enlarged definition for wealth-tax purposes, particularly where the ornaments were not studded with precious or semi-precious stones. The court followed the earlier Full Bench view that the amendment did not operate for periods before 1 April 1972, and the question was answered in favour of the assessee.

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Issues: Whether the extended meaning of "jewellery" introduced by Explanation I to section 5(1)(viii) of the Wealth-tax Act, 1957 applied only from 1 April 1972 and, consequently, whether gold and silver ornaments could be included in the assessee's net wealth for the assessment year 1963-64.

Analysis: The reference concerned the assessment year 1963-64. The Tribunal had held that the Explanation expanding the meaning of "jewellery" came into force only with effect from 1 April 1972 and therefore operated prospectively. The court followed the earlier Full Bench view that the amendment by insertion of the Explanation did not apply to assessment years prior to 1 April 1972, and that gold ornaments not studded with precious or semi-precious stones were outside the extended meaning for those earlier years.

Conclusion: The extended meaning of "jewellery" in Explanation I to section 5(1)(viii) of the Wealth-tax Act, 1957 applied only from assessment year 1972-73 onwards. The question was answered in favour of the assessee and against the Department.

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