Commissioner of Wealth-tax vs Smt. Rupinder Kumari

Rajendra Nath Mittal, J.—This judgment will dispose of W.T. References Nos. 20 and 19 of 1976, which relate to the assessment years 1972-73 and 1973-74, respectively.

The Wealth-tax Appellate Tribunal, Chandigarh Bench, has referred the following question for the opinion of the court in W.T. Reference No. 20 of 1976:

" Whether, on the facts and in the circumstances of the case, the interest of the assessee in the annuity policy is exempt from wealth-tax under the provisions of Section 5(1)(vi) of the Wealth-tax Act, 1957, for the assessment year 1972-73 ?"

The facts, as given in the statement of the case, are that the assessment year commenced on 1st April, 1972. The relevant valuation date is 31st March, 1972. The assessee is an " individual". The WTO completed the assessment on 17th January, 1974, in respect of the net wealth of Rs. 7,38,410 as rounded off. The assessee had claimed an exemption u/s 5(1)(vi) of the W.T, Act, in respect of his annuity policy amounting to Rs. 2,35,174 on the basis of the decision of this court in CWT v. Yuvraj Amrinder Singh [1914] 96 ITR 101. the WTO repelled the claim saying that the above judgment was under appeal in the Supreme Court. On appeal, the AAC reversed the order of the WTO and, following the High Court dieta in Yuvraj Amrinder Singh''s case, accepted the appeal.

An appeal against the judgment was taken by the Department to the Wealth-tax Appellate Tribunal, Chandigarh, which affirmed the order of the AAC and dismissed the same. On an application by the Department, the abovesaid question has been referred for decision to this court.

The question has already been decided by the Division Bench in Yuvraj Amrinder Singh''s case, wherein it was held that the annuity policy was a policy of insurance and was covered by Section 5(1)(vi) of the Act. Merely because the policy became due on a particular date, the whole sum had not become due and payable on that date. Only certain sums would become due and payable to the annuitant every year and would continue to be so for the next several years as prescribed in the policy. It was further observed that wealth-tax could be levied only on the amount which had become due and payable during the relevant assessment years.

Mr. Ashok Bhan has not shown that the above judgment has been overruled by the Supreme Court. We are, therefore, bound by the observations of the learned Division Bench with which, we also agree.

Wealth-tax Reference No. 19 of 1976 relates to the assessment year 1973-74. The facts of that case are similar to those of Wealth-tax Reference No. 20 of 1976. The question referred for opinion of this court is as follows:

"Whether the right or interest of the assessee in the annuity policy has been rightly held by the Tribunal to be exempt from wealth-tax under the provisions of Section 5(1)(vi) of the Wealth-tax Act, 1957, for the assessment year 1973-74?"

The observations in Commissioner of Wealth-tax Vs. Yuvraj Amrinder Singh, fully apply to this case also.

In view of the aforesaid reasons, the questions of law referred to in both the references are answered in the affirmative, that is, in favour of the assessee and against the Department. No costs.