SHANKERLAL GAFURBHAI PATEL Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) At the instance of the assessee, the following question of law, arising out of the order passed by the Income Tax Appellate Tribunal, Ahmedabad Bench 'C', has been referred to this court for its opinion under the provisions of sec. 27(1) of the Wealth-tax Act, 1957 (hereinafter referred to as 'the Act') : "Whether, on the facts and in the circumstances of the case, the assessee was entitled to the exemption u/s 5(1)(xvia) in respect of the National Defence Gold Bonds, 1980?"

(2.) The facts giving rise to the reference, in a nutshell, are as under :

(3.) In 1965, a declaration was made by the Union of India to the effect that the country wanted to strengthen its defence forces against possible aggression by enemy countries and, therefore, the country needed arms and armaments and machines that would make arms and armaments so that the country can become self-sufficient in the matter of its defence. The country required machinery and raw material for the industries to support the people's efforts. The country required fertilizers and farm equipments to grow more food so as to see that dependence on foreign countries is reduced. For all these purposes, the country was not having sufficient gold and, therefore, an appeal was made to the citizens that idle gold, which the people of the country were having, should be handed over to the country so that the need for valuable gold to earn foreign exchange for the country can be satisfied.