COMMISSIONER OF WEALTH TAX Vs. KAMLA DEVI BANGUR

JUDGEMENT

(1.) THESE are two applications under s. 27(3) of the Wealth tax Act, 1957 (No. 27 of 1957), for directing the Tribunal, Jaipur Bench, Jaipur, to state a case and refer the question of law arising out of the Tribunal's order dt. 24th June, 1977, passed in Wealth-tax Appeals Nos. 137 and 138/JP/1966-67 for the asst. yrs. 1968-69 and 1969-70. The reference applications have arisen out of the following facts : The assessee-respondent was assessed for the aforesaid two assessment years under the WT Act by the WTO, Jodhpur, on 6th Feb., 1971. The WTO did not include the whole of the jewellery and ornaments in the total wealth of the assessee in view of the decision of their Lordships of the Supreme Court in CWT vs. Arundhati Balkrishna [1970] 77 ITR 505. Subsequently, s. 5(1)(viii) of the WT Act was amended by the Finance (No. 2) Act of 1971, with retrospective effect from 1st April, 1963. The effect of the amendment was that exemption in regard to jewellery and ornaments for personal use ceased and the value of the jewellery and the ornaments intended for personal use became taxable. Consequently, the same was includible in the net wealth of the assessee from 1st April, 1963. After the amendment, a notice under s. 35 of the Act was issued in respect of both the assessment years to the assessee and thereafter the WTO revised the original assessment in respect of the two years on 13th Sept., 1972. The assessee preferred appeals against the order of the WTO before the AAC of Income -tax, Jodhpur, who by his order dt. 22nd June, 1976, annulled the order of the WTO. Dissatisfied with the order of the AAC of Income-tax, the CIT of Wealth -tax preferred appeals in respect of the two assessment years to the Tribunal. The Tribunal by its order dt. 24th June, 1977, dismissed both the appeals and observed that the exemption granted in respect of jewellery and ornaments to the assessee at the time of original assessment did not disclose any mistake apparent from the record. Hence, the AAC was justified in cancelling the order passed by the WTO under s. 35 of the Act. The petitioner made an application under s. 27(1) of the Act before the Tribunal. That application was rejected by the Tribunal on 26th Dec., 1977. Hence, the petitioner has moved these applications and has prayed that the Tribunal be directed to make a reference to this Court on the following question of law: