COMMISSIONER OF WEALTH TAX Vs. K O MATHEWS

JUDGEMENT

(1.) THE following question of law is referred under Section 27(1) of the Wealth-tax Act, 1957 (for short "the Act"), at the instance of the Revenue.

(2.) THE respondent/assessee was a non-resident Indian, who returned to India for permanent settlement on May 2, 1985. While returning to India, he had brought a Mercedes Benz car and claimed the value of the same as exempt under Section 5(1)(xxxiii) of the Wealth-tax Act. This claim was allowed up to the assessment year 1988-89. During the previous year relevant tp the assessment year 1989-90, the assessee sold the car for Rs. 4,50,000 and the sale proceeds were invested in movable properties and claimed exemption under Section 5(1)(xxxiii) on the amount of Rs. 4,50,000. THE Assessing Officer disallowed the exemption holding that under Section 5(1)(xxxiii) exemption is available only for moneys and the value of assets brought into India and the value of assets acquired out of such money. According, to the Assessing Officer, assets which are sold and converted into money lose the exemption. THE order of the Assessing Officer was confirmed in appeal by the Commissioner of Income-tax (Appeals), Kochi. However, in further appeal by the assessee, the Income-tax Appellate Tribunal upheld the claim of the assessee and allowed the appeal. It is against the said appellate order of the Tribunal, the question of law specified in paragraph 1 of this judgment is referred to.

(3.) IN order to appreciate the correctness of the contentions raised by learned senior Central Government standing counsel, it is necessary to refer to the provisions of Section 5(1)(xxxiii) of the Act. Section 5(1) of the Act provides that subject to the provisions of Sub-section (1A), wealth-tax shall not be payable by an assessee in respect of the following assets, and such assets shall not be included in the net wealth of the assessee. Clause (xxxiii) of Sub-section (1) of Section 5, without the Explanations, reads as follows :