Wealth-tax exemption for capital investment bonds runs from subscription date, not later issue date, under the notification.

Capital investment bonds were treated as eligible for wealth-tax exemption from the date of subscription, because the notification linked relief to ownership from subscription or for the requisite period ending with the valuation date. The clause referring to the date of issue was confined to interest computation and could not be used to deny the exemption. Receipt of the draft and presentation of the application made the subscription effective, so the later actual issuance date was immaterial for the concession. On that basis, withdrawal of the exemption through revisionary orders was not sustainable.

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Issues: Whether the assessee was entitled to wealth-tax exemption in respect of Capital Investment Bonds from the date of subscription or only from the date on which the bonds were actually issued.

Analysis: The exemption clause in the notification made ownership from the date of subscription, or for the requisite period ending with the valuation date, the relevant criterion for wealth-tax relief. The clause dealing with the date of issue was held to operate for the limited purpose of interest computation and could not be extended to deny the exemption. The bond subscription was treated as effective on the date of receipt of the draft and presentation of the application, and the later actual issuance date was held immaterial for the wealth-tax concession.

Conclusion: The assessee was entitled to the wealth-tax exemption from the date of subscription, and the revisionary orders withdrawing the exemption were not sustainable.

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