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TMI Blog1963 (9) TMI 83X X X X Extracts X X X X X X X X Extracts X X X X ..... e, the other assessee, Mahendra, was possessed of 12 years Post Officer National Savings Certificates of the value of ₹ 25,000 which stood in his name, as also 10 year 3 1/2% Treasury Savings Deposit Certificates of the value in all of ₹ 75,000 out of which, certificates of the value of ₹ 50,000 stood in his and his wife's joint names and the rest of the Certificates of the value of ₹ 25,000 in some other name or names. In addition to these certificates, each of the two assesses inherited certificates of the value of ₹ 1,00,000 upon the death of their brother, one Manubhai R. Patel. The holdings as on the 31st of December, 1957, of each of the two assessees in the aforesaid certificates were the same as those on the 31st of December, 1956. The assessee claimed exemption from wealth-tax in respect of these certificates and relied therefore on section 5(1), clause (xvi) of the Act. The Wealth-tax Officer granted exemption to the assessee, Harshad, in respect of certificates of Both the types of the value of ₹ 25,000 each, and so far as the assessee, Mahendra, was concerned, he granted exemption in respect of the 12 year National Savings Deposit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ealth-tax Act. In either event, therefore, those certificates were not includible in the wealth of the assessees. The Appellate Assistant Commissioner declined to accept either of the two contentions and held that the Wealth-tax Officer was entitled to include the value of these certificates in the net wealth of the assessees as the certificates which were admittedly owned by them including the certificates which stood in the names of their nominees. As regards section 5(1)(xvi), the Assistant Commissioner held that clause (xvi) applied only to those certificates which were held by the assessees, in other words, which stood in the names of the assessee, and that the concept of beneficial ownership or "benami" was unknown to section 5(1)(xvi) of the Act. In that view, he held that though the certificates standing in the names of their nominees were the assets of the assessees, includible in the wealth of the assesses, such of the certificates as did not stand in the wealth of the assessees, were not entitled to exemption and, therefore, were rightly included by the wealth-tax Officer in the taxable net wealth of the assessees. Aggrieved by the orders of the Assistant Comm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... operties are not relevant for the purposes of this reference, it is not necessary to quote the rest of the definition of the word "assets". Section 5(1)(xvi) which is the section requires to be construed in this reference, provides as follows : 5. Exemption in respect of certain assets - (1) Wealth-tax shall not be payable by an assessee in respect of the following assets, and such assets shall not be included in the net wealth of the assessee - .... (xvi) ten year treasury savings deposit certificates, fifteen-year annuity certificates, deposits in post office savings banks, post office cash certificates, post office national savings certificates and twelve year national plan savings certificates held by the assessee." Clause (xvi) was subsequently amended, but so far as the present reference is concerned, it is clause (xvi) as it stood prior to the amendment and as cited above, which is relevant. It will be notices at once that both in the definition of "net wealth" as also in section 4 of the Act which provides for the net wealth to include certain assets set out therein, the legislature has used the expression "belonging to the assessee" b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ses, such as the one we have in clause (xvi), is inserted by the legislature for the benefit of the assessees, the court must incline to give such a clause a liberal construction. But in trying to give such liberal construction the court cannot afford to lose sight of the context in which the words or expressions falling for interpretation are use by the legislature in the statute in question. In order, therefore, to appreciate the proper interpretation to be given to the expression "held by the assessee" in clause (xvi), it will be necessary to appreciate whether the legislature has used the two expressions, namely, "belonging to" and "held by the assessee" in different senses or not. The expression "belonging to" has been the subject-matter of construction in many a decision and courts have construed that expression as meaning having proprietary rights or interests ownership in the object in question. Thus, in Heritable Reversionary Co. Ltd. v. Millar the èHouse of a Lords had to construe certain provisions in the Bankruptcy Act of 1856 of Scotland and in particular the expression "belonging to the creditor" as therein use ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onymous with ownership or proprietary rights in a particular property in question, and there can be no doubt that the expression "property belonging to a person" means the property which is of the ownership of that person. Consequently, the certificate in which the rights of ownership vest in an assessee, whether such certificates stand in his name or in the name of another person, such as his income, must be said to belong to the assessee and therefore would be his assets within the meaning of section 2(e) and would form part of the net wealth under section 4 of the Act. For the purpose of computation of his net wealth therefore, it ètherefore, it would not matter whether the property in question stands in his name or stands in the name of another person so long as the beneficial ownership therein vests in the assessee. The Tribunal, therefore, in our view, was right when it held that the value of those certificates was includible in the net wealth of the assessee. The real controversy in this reference, however, starts when we go to the question of interpretation to be given to the expression "held by the assessee". The learned Advocate-General, in sup ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... held" not merely from its content with the expression "registered holder" but on the basis of the ordinary dictionary meaning that would be attachable to the word "held" when used in relation to a person holdings shares of the company. Ordinarily, when one uses the èexpression "a shareholder" he does so meaning thereby the holder of shares whose name is registered in the register of the company. The question, however is that, though a shareholder, within the meaning of the companies Act must mean a holder whose name is registered in the company register, whether the same meaning must be attached to the expression "held by the assessee" in clause (xvi) of section 5(1). Mr. Nanavatys contention was that a clause in one statute cannot be rightly construed in the light or context of another statute, and he argued that we must turn to the expression "held by the assessee" as used in the clause itself. The learned Advocate-General, however, pointed out that as appearing from the order of the Wealth-tax Officer, under the scheme under which these certificates were issued, there was a prescribed limit up to which only an indivi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ficates therein mentioned are those certificates issued by the Central Government under a scheme referred to by the Wealth-tax Officer under which, as stated by him, an individual can purchase such certificates to the extent of ₹ 25,000 and no more. There is no dispute that this is the maximum provided under the aforesaid scheme and up to which an individual can invest in the certificates. It is, therefore, obvious that the expression "held by the assessee" relates to the certificates issued by the Government under the aforesaid scheme and it is to those certificates held by an assessee to which the exemption has been granted under clause (xvi). Since in our view this is the only construction that can be given to the expression "held by the assessee" which governs the word "certificates" in the context in which this expression has been used in that clause, no question of a liberal interpretation of the expression "held by the assessee" as suggested by Mr. Nanavaty can possibly arise. We are clear in our minds that the legislature has used the expression "held by the assessee" as meaning certificates which are registered in the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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