Wealth-tax exemption for shares in a corporation denied where the entity was not declared a company under the Act.

Section 5(1)(xix) of the Wealth-tax Act exempted only shares held by an assessee-company in another company. A corporation formed under a State Act counted as a "company" only if the Central Government had declared it so under the Wealth-tax Act; a declaration made under the Indian Income-tax Act, 1922 did not extend to this Act. As the Bombay State Financial Corporation had not been so declared, its shares were not exempt from net wealth. The court also noted that any apparent anomaly could not be cured by interpretation, and the assessee's claim failed.

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Issues: Whether the value of shares held by the assessee in the Bombay State Financial Corporation was exempt from net wealth under section 5(1)(xix) of the Wealth-tax Act, 1957.

Analysis: The exemption under section 5(1)(xix) applied only to shares held by an assessee-company in another company. The definition of "company" in section 2(h) of the Wealth-tax Act, 1957 included a corporation established by or under a Central, Provincial or State Act only if it had been declared by the Central Government, by general or special order, to be a company for the purposes of that Act. The Bombay State Financial Corporation had not been so declared under the Wealth-tax Act, 1957, and a declaration under the Indian Income-tax Act, 1922 could not be carried over to the Wealth-tax Act, 1957. Any perceived anomaly could not be remedied by judicial interpretation.

Conclusion: The assessee was not entitled to the exemption, and the question was answered in the negative.

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