Commissioner of Wealth-tax (Central) vs T. Meenakshi Achi

Veeraswami, J.—This is a reference'' under the Wealth-tax Act. The assessee, a female, transferred on November 21, 1956, 7,000

ordinary shares in a certain company to her minor son, which were of the total face value of Rs. 1,05,000. This amount was not included in her

wealth-tax return for the assessment years 1960-61 and 1961-62. Her contention that she was not caught by Section 4(1)(a)(ii) of the Wealth-tax

Act was overruled by the department, but accepted by the Tribunal. At the instance of the Commissioner of Income Tax, the reference comes

before us of the question :

Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the value of shares transferred by the

assessee to her minor son is not caught by Section 4(1)(a)(ii) of the Wealth-tax Act, and is not therefore liable to be included in her wealth-tax

assessments for the years 1960-61 and 1961-62?

Section 3 of the Wealth-tax Act charges for every financial year a tax inrespect of the net wealth of every individual. The term ""individual"" has

not been defined, but, obviously, without anything more, it should indicate a male or female, in accordance with the context. ""Net wealth"" means,

for purposes of the Act, the amount by which the aggregate value computed in accordance with the provisions of the Act of all the assets belonging

to the assessee on the valuation date, including assets required to be included in his net wealth as on that date under the Act, is in excess of the

aggregate value of all the debts owed by the assessee on the valuation date, other than certain specified items. Section 4 directs that, in computing

the net wealth of an individual, the value of certain assets should be included as belonging to him. Sub-section (1) of this section is in two parts, the

first covered by Sub-clause (a), which sets out four classes of assets to be included, and the other covered by Sub-clause (b), which sets out as

includible the value of a partner''s interest in a firm or association, in the prescribed manner. The question referred to us entirely turns on a

construction of the clauses.

We are inclined to accept the contention for the revenue that "" an-individual"", in the opening words of Sub-section (1), should be read in a

distributive sense and in the particular context in each of the clauses, and not as contended by the assessee that the significance of that with

reference to Clause (a)(i) should be applied and followed as to the scope of each of the rest of the clauses. On a question of construction, the

court''s primary duty is to interpret the words employed by the legislature in a section, and in doing so, it has, of course, to keep in view the context

of those words in the particular section, and proceed in the light of the other sections, as well as the scheme, intendment and general scope of the

Act. The normal rules of construction are, of course, to be followed in the elucidation, but eventually it is the opinion of the court, formed on a

consideration of those words in the context and the arguments addressed for and against a particular meaning to be given to them. We are inclined

to think that rarely is the problem of interpretation satisfactorily solved by matching decided cases rendered on particular provisions in different

enactments which the court is called upon to construe.

The object of Section 4 of the Wealth-tax Act is not for to seek which is to avoid evasion by certain devices, resorted to by human propensities

directed towards that end. One tendency commonly noted is to make transfers benami or without consideration or nominally by a husband to a

wife or a child. Occasionally, transfers may be found to have been made by persons to other members of an association or a partner of a firm,

which may be designed to evade the tax effect. The legislature, therefore, attempts not infrequently to plug the loopholes on that matter. In that

way, Section 4 of the Wealth-tax Act resembles Section 16(3) of the Income Tax Act, 1922. But the two enactments were made at different times

with distinct objectives. As Section 4 of the Wealth-tax Act stood as originally enacted, it directed to be included in the wealth of an individual, as

belonging to him, the value of assets which on the valuation date are held (i) by his wife to whom they had been transferred by the individual in

certain circumstances, other than for ''adequate consideration, (ii) by a minor child not being a married daughter to whom the assets had been

transferred by the individual, again, otherwise than for adequate consideration, (in) by a person or association of persons to whom they had been

transferred by the individual otherwise than for adequate consideration for the benefit "" of the individual or his wife or minor child "" and (iv) by a

person or association of persons to whom such assets had been transferred by the individual otherwise than under an irrevocable transfer. In the

first case, the individual who transferred without doubt is the husband, and that is in keeping with the opening words that in computing the net value

of an. individual "" there shall be included, as belonging to him "". But, what does the expression "" an individual "" mean in the second case ? It is here

divergent arguments have been addressed to us on the one hand stating; that "" an individual"" for the purpose of that case should mean a male, as in

the first case, and on the other, it should mean, in the context, either that or a female. The second alternative contention appeals to our minds, that

is, "" an individual"" in the second case takes its meaning, whether it is. a male or a female, from the context, and there is no reason why it should

only be confined to a male. The article "" the "", to our minds, before the word ""individual "" does not have the force of "" such "" which has been

employed in the analogous clause in Section 16(3) of the Income Tax Act. The opening words of Section 4 of the Wealth-tax Act speaks of "" an

individual "" followed by the words "" as belonging to him "". But Section 13. of the General Clauses Act (Act X of 1897) says that words importing

the masculine gender shall be taken to include females. That is also in consonance with the object of the Wealth-tax Act, for it is not conceivable

that the legislature thought, for purposes of avoidance of evasion, a female-should be treated exceptionally and left out of the purview of the net for

evaders. The charging section, as we already mentioned, speakes of "" every individual"" which, we have no doubt, includes a male and female.

When in the next section "" an individual"" is mentioned, though followed by the-words, "" as belonging to him "", we can find no adequate reason why

it should be confined to a male, unless the context of each of the following, clauses demands that interpretation. One need not be surprised that

statutes do contain the same words, which, used in different contexts, convey different significance or meaning, even in the same section. Section 4

of the Wealth-tax Act is illustrative of that. Years ago, particularly when the Income Tax Act, 1922, was enacted, or when Section 16(3) of it was

made law, the position of women in this country might perhaps have been different, for, it is common knowledge that there were more cases of

husbands transferring properties without consideration to their wives or their children, rather than wives or females doing that in favour of either

their husbands or their children. It was, perhaps, this aspect that weighed with the Select Committee, which made the report, in the light of which

Section 16(3) of the Income Tax Act, 1922, was formulated and it was passed through the legislature. The Commissioner of Income Tax, Madhya

Pradesh and Bhopal Vs. Sodra Devi, which has been strongly pressed upon us for the assessee, found ambiguity in the language of Section 16(3),

and solved it in the light of the history of the provision, particularly the report of the Select Committee, which led to its enactment. Apart from that,

the word "" such "", occurring in every provision succeeding the provision analogous to Section 4(1)(a)(i) of the Wealth-tax Act, in the language of

Section 16(3) of the Income Tax Act, fixes the meaning of "" individual "" which, in the context of the wife, meant a male. To add to that, the word

both "", in the context in which it appeared along with the collocation in Section 16(3)(b) of the Income Tax Act, made further contribution to the

particular construction, which was adopted in that case. We do not think that merely on the basis that the two sections have cognate objects and

somewhat the wording in both has resemblance to each other, we can, for that reason, automatically apply the rule in that case. As we mentioned,

the primary duty of the court is to interpret each section, having regard to its particular words and when the section that calls for interpretation is in

a different statute, which is made for the first time, we do not think that the interpretation made by a court of a different section in a different Act, in

the context of its legislative history, can be imported into the interpretation of the former. That principle has been, recognised by Attorney-General

for Ontario v. Perry, [1934] A.C. 477 .

To come back to the second case of inclusion in Section 4(1)(a), there is nothing in the language or in the context of the rest of the provisions in

that section, or even the Act, to compel us to hold that the ""individual"" there means only a male and does not include a female, according to the

context. When we come to the next case of inclusion in Section 4(1)(a) "" an individual "", again, as it appears to us, indicates either a male or a

female, according to the context, and, for instance, in the context of a wife, it can only mean a male. But when we come to minor child, it can mean

a male or female. The word "" both "", which occurs in Section I6(3)(b) of the Income Tax Act, is not used in Section 4(1)(a)(ii) of the Wealth-tax

Act. The fourth case of inclusion also does not suggest that it is confined only to the male and so also Section 4(1)(b). Though, at flrst sight,

Section 16(3) of the Income Tax Act and Section 4(1) of the Wealth-tax Act may appear to resemble each other, on closer scrutiny, they are

different, both by the language which is employed and also in that the Wealth-tax Act has no history, such as Section 16(3) of the Income Tax Act

has had for its enactment. For the assessee, our attention has been invited to Craies on Statue Law, sixth edition, pages 139 and 141, Banarasi

Devi Vs. Income Tax Officer, Calcutta, , Philip John Plasket Thomas v. Commissioner of Income Tax, [1963] 49 ITR (S.C.) 97 and His Highness

Yeshwant Rao Ghorpade Vs. Commissioner of Wealth-tax, Bangalore, but we do not think they assist us to come to the conclusion pressed for

the assessee.

We answer the question in favour of the revenue with costs. Counsel''s fee Rs. 250.