Judgment:
Ajit K. Sengupta, J.
1. In this reference made under Section 27(1) of the Wealth-tax Act, 1957, at the instance of the assessee, the following questions have been referred by the Tribunal for the opinion of this court:
'(1) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in merely following its earlier orders for the assessment years 1975-76, 1976-77 and 1977-78 and upholding the disallowance of the claim for exemption of jewellery under Sections 5(1)(viii) and 5(1)(xiii) of the Act ?
(2) Whether the Tribunal was justified in law in not upholding the claim of exemption of jewellery in the facts and circumstances of the case ?
(3) Whether the Tribunal's decision was perverse on the point of taxation of jewellery having not considered the material points in dispute with reference to Section 5(1)(xiii) read with Section 5(1)(viii) of the Wealth-tax Act, 1957 ?'
2. The assessee is the sole beneficiary and executor of the will left by his wife, Mrs. Hila Ginwalla. This reference relates to the wealth-tax assessment made upon Mrs. Ginwalla in respect of the assessment years 1964-65 to 1974-75 and 1978-79 to 1981-82, when she was alive. The facts as found by the Tribunal are as under :
The assessee, while filing the returns for the aforesaid assessment years, claimed exemption of jewellery in terms of sections 5(1)(xiii) and 5(1)(viii) of the Act. The assessee showed the said value of jewellery in Part IV of the return as being assets not includible in her net wealth. In the assessee's family, as in most Parsi families, the items of jewellery belonging to the female members of the family are not intended for sale but are passed on from mother to daughter or from mother to daughter-in-law from generation to generation. In the case of the assessee, the items of jewellery were received by the assessee from her own mother at the time of her Navjote (thread ceremony) or thereafter from her mother-in-law at the time of her marriage and thereafter in respect of one or two pieces such as her engagement ring from her husband at the time of her engagement or thereafter. The said items of jewellery are not intended for sale but for passing on to the assessee's nieces (since the assessee has no children) or other female members of her family. In the premises, the assessee claimed that such pieces of jewellery constitute heirloom and are exempt under Section 5(1)(xiii) of the Act. The assessee contended further that the words 'any drawings', 'heirloom' appearing in the said section create an exemption ; the words 'not falling . . . and not intended for sale' create an exception to the exemption. The words 'but not including jewellery' exclude jewellery from the exception ; since the jewellery is excluded from the exception by the exemption, it falls within the exemption. The assessee, in particular, contended that the significant words are 'but not including jewellery' and not 'and not including jewellery'. If the words had been 'and not including jewellery' they would have created jewellery as another exception to the exemption. The assessee thus finally contended that the word 'but' operates to create an exclusion from what goes immediately before, i.e., an exclusion from the exception.
3. Both the Appellate Assistant Commissioner as well as the Tribunal did not agree with the contention advanced on behalf of the assessee.
4. Before us, the submissions made before the Tribunal were reiterated. It was submitted that the jewellery in question belonging to the assessee was her heirloom and it should be exempt under Section 5(1)(xiii) of the Wealth-tax Act, 1957. Clause (xiii) of Section 5(1) is extracted hereinbelow:
'(xiii) any drawings, paintings, photographs, prints and any other heirloom not falling within Clause (xii) and not intended for sale, but not including jewellery.'
5. In our view, a plain reading of Clause (xiii) makes it quite clear that jewellery is intended to be outside the purview of exemption available in Clause (xiii). A look at the legislative history also makes the position quite clear. Exemption in respect of jewellery used to be claimed under Section 5(1)(viii) of the said Act, in the light of the decision of the Supreme Court in CWT v. Arundhati Balkrishna : [1970]77ITR505(SC) . In that case, the Supreme Court held that jewellery used for personal use was exempt in entirety under Clause (viii). Subsequently, the Legislature, by the Finance (No. 2) Act, 1971, excluded jewellery as articles of personal or household use with retrospective effect from April 1, 1963. The assessee has now claimed exemption in this case under Section 5(1)(xiii) of the said Act. The expression 'but not including jewellery' appears after the comma, which makes it quite clear that jewellery is not exempt under this clause. The language clearly conveys that jewellery may fall under heirloom, not intended for sale, yet it is not in the exempt category under the provision. There is no element of equivocation to admit of any other construction.
6. We, therefore, answer the first and second questions in the affirmative and in favour of the Revenue. The third question is answered in the negative and in favour of the Revenue.
S.K. Sen, J.
7. I agree.