TMI Blog1998 (6) TMI 104X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee moved before the first appellate authority and by the impugned order Dy. CWT(Appeals) held that the aforesaid decision of the Tribunal applies to the present case. Accordingly, directed the Wealth-tax Officer to allow relief to the assessee. 3. The learned departmental representative assailed the finding recorded by the first appellate authority. It has been submitted that the first appellate authority placed reliance on the decision of the Tribunal reported in S.D. Nagrolwala's case, but the decision has been over-ruled by the Special Bench of the Tribunal in the case of Smt. Sushilaben A. Mafatlal v. WTO [1986] 18 ITD 189 (Bom.). Therefore, according to the representative, the impugned order has to be revised. Further relia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eto preclude the commutation of any portion thereof into a lump sum grant;" The correctness of the aforesaid decision came up for consideration before the Special Bench in view of the contradictory decisions between various Benches of the Tribunal. The Special Bench in the case of Smt. Sushilaben A. Mafatlal held that the deposit under the CDS Act is not exempt as an annuity because what is paid every year as instalment of principal and interest is not an annuity in the eye of law. Therefore, the Special Bench of the Tribunal reversed the finding of the decision reported in S.D. Nagrolwala's case. The aforesaid view has been fortified by the decision of Gauhati High Court reported in the case of Smt. Ratnamala Agarwalla wherein it has bee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arlier decision of the Tribunal reported S.D. Nagrolwala's case. On perusal of the aforesaid decisions, we find that it is a matter of record that the subsequent Special Bench decision of the Tribunal reported in Smt. Sushilaben A. Mafatlal's case was not brought to the notice of the Allahabad High Court. In the other two decisions, ie., Biswajit Samonta's case and VM. Rao's case it has been held that the deposit made under the Compulsory Deposit Scheme is exempted under section 5(1)(xxvi) of the wealth-tax Act. We do not find any dispute in the aforesaid proposition. Under section 3 of the Act, wealth-tax is levied in respect of net wealth on the corresponding valuation date. Under section 4 of the Wealth-tax Act it has been provided that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pecial Bench decision of the Tribunal, this aspect was also considered. At para-20 of the Special Bench decision, it has been mentioned as follows : "Further the introduction of section 7A in the CDS Act granting exemption under section 5 of the 1957 Act to the compulsory deposits clearly showed the intention of the Legislature to grant this specific exemption because the deposits under the Compulsory Deposit Scheme would otherwise not have been entitled to any exemption with regard to the wealth-tax. If these deposits could be exempted as an annuity. Section 7A would be rendered redundant. The least we can say is that this shows the intention of the Parliament to give a specific exemption to Compulsory Deposit Scheme deposits which in th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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