Retrospective wealth-tax amendment treated gold ornaments as jewellery, making them includible in net wealth and not exempt.

The retrospective amendment to section 5(1)(viii) of the Wealth-tax Act, 1957 by the Finance (No. 2) Act, 1971 applied from 1 April 1963, so for assessment year 1963-64 gold ornaments fell within the scope of "jewellery". Earlier Delhi High Court rulings treated gold ornaments as jewellery even without precious stones, with the result that such ornaments were not exempt from inclusion in net wealth. The document states that the assessee's gold ornaments were therefore not exempt from wealth-tax and were includible in the taxable wealth.

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Issues: Whether gold ornaments of the assessee valued at Rs. 4,760 were "jewellery" and, therefore, not exempt from inclusion in the total wealth for the assessment year 1963-64 under section 5(1)(viii) of the Wealth-tax Act, 1957.

Analysis: The amendment to section 5(1)(viii) by the Finance (No. 2) Act, 1971 operated retrospectively from 1 April 1963. For the relevant assessment year 1963-64, gold ornaments were within the scope of "jewellery" and were excluded from the exemption. The earlier Division Bench decisions held that gold ornaments, even if not studded with precious stones, constituted jewellery and were not exempt under the provision.

Conclusion: The gold ornaments were jewellery and were not exempt from wealth-tax. The issue was decided against the assessee and in favour of the Revenue.

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