Wealth-tax exclusion for pre-1964 gifts held available where assessment fell within the statutory period.

The proviso to section 4(1)(a) of the Wealth-tax Act was interpreted as governing the wealth-tax assessment itself, not merely the taxability of the gift. Assets gifted to the assessee's wives before 1 April 1964 were therefore excluded from net wealth for assessment year 1967-68, because the statutory language was held to apply to assessment years commencing after 31 March 1964 and to exempt transferred assets from inclusion within that period. The assessee was entitled to the exclusion, and the issue was answered in the assessee's favour.

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Issues: Whether, under the proviso to section 4(1)(a) of the Wealth-tax Act, 1957, assets gifted to the assessee's wives prior to 1 April 1964 were liable to be excluded from computation of net wealth for assessment year 1967-68.

Analysis: The proviso to section 4(1)(a) was read as governing the wealth-tax assessment itself, not merely the gift-taxability of the transfer. The words referring to assessment years commencing after 31 March 1964 were held to qualify the wealth-tax assessment period for which the exclusion operated. The object of the provision was to grant exemption from inclusion of transferred assets in the individual's net wealth within the statutory period, regardless of when the gift was made, so long as the assessment fell within the relevant range.

Conclusion: The assessee was entitled to exclude the value of the assets gifted to his wives from the net wealth computation, and the question was answered in the affirmative in favour of the assessee.

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