Irrevocable transfer of jewellery under wealth tax rules excluded the asset from net wealth until revocation was exercised.

Jewellery transferred under a deed that allowed revocation only after 74 months was treated as an irrevocable transfer for the relevant period under the Wealth-tax Act, so the value of the asset was not includible in the transferor's net wealth until any revocation power was actually exercised. The transferor's retained interest was not regarded as an asset in her hands while the transferee was entitled to hold the property for more than six years. Accordingly, the jewellery was excluded from the assessee's net wealth on the valuation date.

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Issues: Whether the value of jewellery transferred under a revocable arrangement could be excluded from the assessee's net wealth under the Wealth-tax Act.

Analysis: The transfer deed permitted revocation only after 74 months, which brought the transaction within the statutory concept of an irrevocable transfer for the relevant period. Under the Wealth-tax Act, value of assets transferred under such a transfer is to be included in the net wealth only when the power of revocation is exercised. The interest retained by the transferor was also not an asset in the transferor's hands during the period when the transferee was entitled to hold the property for more than six years.

Conclusion: The jewellery transferred by the assessee was not includible in her net wealth on the valuation date and had to be excluded from computation.

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