2003 (1) TMI 78 - HC - Wealth-tax

Whether on the facts and in the circumstances of the case the assessee is entitled to claim exemption of the price received by him on the sale of the car under section 5(1)(xxxiii) of the Wealth-tax Act ? In the instant case the Tribunal also on a consideration of the provisions of section 5(1)(xxxiii) has taken the view that the assessee is entitled to claim exemption of the value of the Benz car brought by him from outside India or the price received by him on the sale of the car. We are of the view that the Tribunal is perfectly justified in taking such a view. - we answer the question referred to us in the affirmative i.e. in favour of the assessee.

Summary

Issues:
- Interpretation of section 5(1)(xxxiii) of the Wealth-tax Act regarding exemption eligibility for the sale proceeds of an asset brought into India by a non-resident Indian.

Detailed Analysis:

The case involved a non-resident Indian who returned to India and brought a Mercedes Benz car claiming exemption under section 5(1)(xxxiii) of the Wealth-tax Act. The Assessing Officer disallowed the exemption on the grounds that assets converted into money lose the exemption. The Commissioner of Income-tax (Appeals) upheld this decision, but the Income-tax Appellate Tribunal ruled in favor of the assessee, leading to the current reference by the Revenue.

The main contention was whether the sale consideration of the Benz car, brought into India by the assessee, is eligible for exemption under section 5(1)(xxxiii) of the Act. The Revenue argued that once the asset is converted into money, the exemption is no longer available. However, the assessee claimed that the sale consideration of the Benz car qualifies as the value of the asset brought into India, making it eligible for exemption under the clause.

The court analyzed the provisions of section 5(1)(xxxiii) and emphasized the significance of the term "value of assets" in determining the eligibility for exemption. Referring to legal dictionaries, the court explained that the value of assets refers to the money's worth or the price of the assets in the market. The court also highlighted that the clause allows for exemption on the value of assets acquired with the moneys brought by the assessee from abroad, indicating that the sale consideration of the original asset remains eligible for exemption if reinvested in other assets.

Ultimately, the court agreed with the Tribunal's view that the assessee is entitled to claim exemption on the value of the Benz car brought into India or the price received from its sale. The court interpreted the provisions of section 5(1)(xxxiii) to support the assessee's claim for exemption on the sale proceeds of the asset brought from abroad. As a result, the question referred to the court was answered in favor of the assessee, affirming their entitlement to the exemption under the Wealth-tax Act.