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Interpretation of s. 5(1A) of the W.T. Act, 1957 regarding exemption limits for assets covered by various clauses. Analysis: The judgment involved an interpretation of s. 5(1A) of the Wealth Tax Act, 1957 in a case where the assessee's net wealth included assets exempt from wealth tax under specific clauses of s. 5(1). The controversy arose regarding the exemption limit of Rs. 1,50,000 prescribed by s. 5(1A) for assets covered by different clauses, including cls. (xv), (xvi), (xxiii), and (xxv). The assessee argued that assets under cls. (xv) and (xvi) were totally exempt, and the exemption limit applied to other assets. However, the Commissioner disagreed, asserting that the overall limit of Rs. 1,50,000 applied uniformly to all assets. The Tribunal upheld the Commissioner's view, leading to the reference before the High Court. The High Court analyzed the provisions of s. 5(1A) and the proviso in detail. Sub-section (1A) restricts the exemption for assets falling under specific clauses to Rs. 1,50,000 in aggregate. The proviso, however, allows for raising this limit if the value of assets under cls. (xv) and (xvi) exceeds Rs. 1,50,000 and were owned prior to March 1, 1970. The court emphasized that the exemption limit applies to all assets, including those under cls. (xv) and (xvi), but the proviso raises the limit only if the value of these specific assets surpasses Rs. 1,50,000. The court noted that the legislative intent was to protect assessees who had invested in assets previously exempted from wealth tax. The court rejected the assessee's argument that the exemption limit of Rs. 1,50,000 applied only to assets other than those under cls. (xv) and (xvi). The court held that the overall limit applied to all assets, including those covered by cls. (xv) and (xvi), with the proviso allowing for a raise in the limit if the specific assets' value exceeded Rs. 1,50,000. The court cited a similar interpretation by the Kerala High Court in a previous case. As the value of assets under cls. (xv) and (xvi) did not exceed Rs. 1,50,000 in the case at hand, the court upheld the Commissioner's decision, confirming the Tribunal's view. In conclusion, the High Court answered all questions in the affirmative, ruling against the assessee. The judgment clarified that the exemption limit of Rs. 1,50,000 under s. 5(1A) applies to all assets, including those under specific clauses, with the proviso allowing for a raise in the limit for certain assets under conditions specified in the statute.
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