DAMJI JAIRAM Vs. COMMISSIONER OF WEALTH TAX

JUDGEMENT

(1.) THE Cuttack Bench of the Wealth-tax Tribunal has stated a case under Section 27(1) of the Wealth-tax Act, 1957 (hereinafter referred to as " the Act ", referred the following question for the opinion of the court:

(2.) ASSESSEE is an individual. The relevant assessment year is 1974-75, the relevant valuation date being March 31, 1974. ASSESSEE had made a gift of Rs. 20,000 in cash to his wife in an earlier year and the donee had invested the same amount in a fixed deposit with a bank. The WTO treated this amount as includible in the assessee's assets under Section 4(1)(a) of the Act and finding that the asset was not held by the assessee did not grant exemption in respect of the asset under Section 5(1)(xxvi) of the Act. The assessee appealed to the AAC who took the view that the exemption in Section 5(l)(xxvi) of the Act was intended to be given to all fixed deposits forming part of the net wealth of the assessee subject to other limitations and accordingly directed exemption in respect of the asset under consideration.