Wealth-tax treatment of matured gold bonds: post-maturity instrument was a taxable document of title to gold, not an exempt bond.

National Defence Gold Bonds, 1980, after maturity but before redemption, ceased to carry interest and lost their character as assignable bonds; the holder retained only a right to obtain delivery of the underlying gold on presentation of the matured instrument. An administrative notification extending the redemption date did not change the instrument's legal nature for wealth-tax purposes. The matured document was treated as a document of title to gold and therefore a taxable asset. The exemption under section 5(1)(xvia) of the Wealth-tax Act was not available.

---

---

Issues: Whether the value of National Defence Gold Bonds, 1980, which had matured before the valuation date but were not redeemed, was exempt from wealth-tax under section 5(1)(xvia) of the Wealth-tax Act.

Analysis: On maturity, the bond ceased to carry interest and lost its character as an assignable bond. The holder's right thereafter was only to obtain delivery of the underlying gold on presentation of the matured document. The extension of the redemption date by administrative notification did not alter the legal nature of the instrument for wealth-tax purposes. The exemption claimed was therefore not available.

Conclusion: The matured instrument was only a document of title to gold and constituted a taxable asset; the wealth-tax exemption was not available to the assessee.

---