TaxTMI 
TaxTMI 
1986 (7) TMI 18
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.... whom he had gifted the said gold ornaments in the year 1949 at the time of engagement with her. According to the assessee, the gift was made by him to big wife prior to the coming into force of the Wealth-tax Act, and so the value of the gold ornaments could not be included in his wealth under section 4(1)(a)(i) of the Act. The Wealth-tax Officer did not accept the assessee's case of gift of the gold ornaments before his marriage and the value of the said ornaments was worked out at the rate of Rs. 145 per tola in the assessment order. Appeals preferred before the Appellate Assistant Commissioner were dismissed. In the further appeals preferred by the assessee before the Income-tax Appellate Tribunal, a new plea was raised on his behalf that even if the gold ornaments are includible in the net wealth of the assessee under section 4(1)(a)(i) of the Act, yet they were excluded on account of the exemption provided by clause (viii) of sub-section (1) of section 5 of the Act, as they were used by his wife who was a member of his household. This argument was advanced in the alternative, besides the argument based on the alleged gift said to have been made by the assessee to Smt. Pushpa ....
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....x Act, 1957, applied to the case of the assessee to warrant the inclusion of the value of gold ornaments in the net wealth of the assessee ? 2. Whether, on a true construction of section 5(1)(viii) of the Act, the assessee is entitled to the exclusion of the value of gold ornaments from the computation of his net wealth ? " By the Finance (No. 2) Act of 1971, clause (viii) of section 5(1) of the Act was amended by adding the words " but not including jewellery " at the end of the clause and two Explanations were also added by the same amending Act. Thus, section 5(1)(viii), as it stood after by the Finance (No. 2) Act of 1971, reads as under : "(viii) furniture, household utensils, wearing apparel, provisions and other articles intended for the personal or household use of the assessee, but not including jewellery: Provided that the furniture, utensils or other articles are neither made wholly or partly of, nor contain (whether by way of embedding, covering or otherwise), gold, silver, platinum or any other precious metal or any alloy containing one or more of such precious metals : Provided further that nothing in this clause shall operate to exclude from the net wealth of th....
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.... was raised before the Gujarat High Court in CWT v. Mrs. Arundhati Balkrishna [1968] 70 ITR 203. The learned judges of the Gujarat High Court held that the scheme of section 5 appeared to be that if any particular asset or assets of the assessee fell within any one of the clauses of section 5(1), such asset or assets must not be included in the net wealth of the assessee. Under clause (xv) of section 5(1), jewellery belonging to the assessee up to the maximum limit of Rs. 25,000 was not includible in the net wealth, while under clause (viii), exemption could be claimed only in respect of jewellery and ornaments which were intended for the personal use of the assessee like any other articles of personal use. Their Lordships expressed the view that jewellery and ornaments though they can be collectively described as jewellery, if they fall within the four corners of section 5(1)(viii) can be excluded from the net wealth of the assessee and need not necessarily be governed by section 5(1)(xv), but the exemption under section 5(1)(viii) would be available only when the article was intended for the personal use of the assessee concerned and, in that event, the exemption would apply to a....
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....e Court in the case of CWT v. Arundhati Balkrishna [1970] 77 ITR 505 (SC). Section 5(1)(xv) of the Act dealt with jewellery in general, whether intended for personal use of the assessee or riot, while jewellery intended for the personal use of the assessee specifically came within the scope of section 5(1)(viii) of the Act. Thus, the value of all jewellery of an assessee intended for his personal use would stand excluded under section 5(1)(viii) of the Act in the computation of the net wealth of the assessee. It was pointed out by their Lordships of the Supreme Court that jewellery was excluded from the purview of clause (viii) of section 5(1) of the Act with effect from April 1, 1963, and so the amendment made in clause (viii) would become operative with effect from April 1, 1963. Thus, the amended provisions of section 5(1)(viii) would be effective in relation to assessments made in respect of the accounting years from April 1, 1963. It may be observed that in Arundhati Balkrishna's case [1970] 77 ITR 505, their Lordships of the Supreme Court approved the decision of the Gujarat High Court and it was held that the provisions of sections 5(1)(viii) and 5(1)(xv) dealt with differen....
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.... v. CIT [1976] 103 ITR 61. Their Lordships of the Supreme Court observed in the aforesaid decision that silver bars could by no stretch of imagination be deemed to be articles or effects meant for personal use, nor could the sovereigns and silver coins by their use on special occasions of worship of Mahalakshmi be considered as effects meant for personal use. In CWT v. Arti Goenka [1980] 121 ITR 632 (Mad), it was held by their Lordships of the Madras High Court that loose diamonds cannot be put on by a person and so they cannot be used by a person and do not fit into the connotation of " personal use " and could not be excluded from payment of wealth-tax under section 5(1)(viii) of the Act. It was observed that the intention of putting any article to personal use has to be tested in the light of what a reasonable person will do and cannot be examined in the light of individual preferences. In Chandra Kumar Singh Kasliwal v. Addl. CWT [1980] 122 ITR 151 (MP), the assessees who were minors, claimed exemption under section 5(1)(viii) of the Act in respect of their share of gold ornaments an jewellery of their deceased mother. The Tribunal allowed exemption in respect of gold ornamen....
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....ing any precious or semi-precious stones, and whether or not worked or sewn into any wearing apparel. In CWT v. Aditya Vikram Birla [1978] 114 ITR 711 (Cal), it was held that the dictionary meaning of the word " jewellery " is not so wide or clear as to bring in all valuable ornaments within its fold. On the contrary, in popular parlance, " jewellery " connotes use of stones, precious, semi-precious or even imitation in the ornaments concerned. It is because of this reason that Explanation I was introduced in section 5(1)(viii) and although the amendment, so as to include the words "but not including jewellery ", was introduced retrospectively with effect from in April 1, 1963, yet Explanation I was inserted prospectively with effect from April 1, 1972. Thus, after the amendment was made, the ambit of the word " jewellery " was extended so as to include ornaments made of gold, silver, platinum or any other precious metal or any alloy containing any precious or semi-precious stones. It appears that earlier there was a difference of opinion between the various High Courts as to whether ornaments containing precious stones made of gold or silver were exempted from the net wealth of t....
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....nt years prior to April 1, 1972, " jewellery " could not be held to include gold or silver ornaments not studded with precious or semiprecious stones, within the meaning of section 5(1)(viii) of the Act. The Full Bench of the Madhya Pradesh High Court did not agree with the view taken by the Gujarat High Court in Jayanti Lal Amrat Lal's case [1976] 102 ITR 105 and the decision of the Allahabad High Court in CWT v. H.H. Maharaja Vibhuti Narain Singh [1979] 117 ITR 246. In Smt. Meera Jaiswal v. CWT [1982] 136 ITR 548, the Punjab and Haryana High Court also followed the decision of the Calcutta High Court in Aditya Vikram Birla's case [1978] 114 ITR 711, and did not agree with the view taken by the Gujarat High Court and the Allahabad High Court in Jayanti Lal Amrat Lal's case [1976] 102 ITR 105 and Vibhuti Narain Singh's case [1979] 117 ITR 246 (All) respectively. In CWT v. Smt. Savitri Devi [1983] 140 ITR 525, the learned judges of the Delhi High Court struck a dissenting note and while disagreeing with the view taken by the Orissa, Calcutta and Madhya Pradesh High Courts in the cases referred to above the Delhi High Court preferred to follow the decisions of the Gujarat and Allah....