1966 (10) TMI 41 - SC - Wealth-tax

Whether the aforesaid asset of ₹ 1,43,727 is exempt under section 5(1)(xxi) read with the second proviso thereunder of the Wealth-tax Act ?

Held that:- In the Wealth-tax Act, assessment year has been defined to mean the year for which tax is chargeable under section 3 of that Act. Since the Act came into force on 1st April, 1957, the financial year 1957-58 was the first assessment year for which tax became chargeable, and, consequently, for purposes of the second proviso to section 5(1)(xxi), the assessment year following the commencement of operations for establishment of the unit in the case of any company which commenced the operations any time before the 1st April, 1957, will be the assessment year 1957-58. Prior to the year 1957-58, there was no assessment year as defined under the Act, and, consequently, the first assessment year for which exemption could be claimed was this assessment year 1957-58. The respondent which had commenced operations for establishment of its new unit prior to 1st April, 1957, was rightly allowed exemption in respect of the amount that had been invested by them up to the relevant valuation date. The answer returned by the High Court was, therefore, correct. Appeal dismissed.