Judgment

KHANNA, J.:- This appeal on certificate is directed against the judgment of Patna High Court whereby that Court answered the following three questions referred to it under Section 27 of the Wealth Tax Act, 1957 (Act No. 27 of 1957) thereinafter referred to as the Act) against the assessee :

(l) Whether in computing the market value of the shares the assessee is entitled to the deduction of a sum of Rs. 2,30,546 by way of brokerage commission?

(2) Whether on a true construction of Sections 5 (1) (viii) and 5 (1) (xv) of the Wealth Tax Act, the assessee is entitled to the exclusion of the value of jewellery amounting to Rs. 27,27,330 from the computation of his total wealth?

(3) Whether any part of the amount of Rs. 36,87,419 fixed as compensation payable to the assessee under the Bihar Land Reforms Act is liable for inclusion in the total wealth of the assessee?"

2. The assessee was former Maharajadhiraja of Darbhanga. The matter relates to the assessment year 1957-58, the relevant valuation date for which was March 31, 1957. The assessee filed a return on April 22, 1958 declaring a net wealth of Rs. 2,77,489. A revised return was filed subsequently showing the total wealth to be Rs. 2,69,58,130. The Wealth Tax Officer determined the net wealth of the assessee to be Rs. 4.57,85,996.

3. The assessee held shares and stocks in various limited companies. In the return filed by him the assessee gave correct valuation of those shares and stocks as given in the stock exchange quotations and the quotations furnished by well-known brokers, but he claimed a deduction of a sum of Rupees 2,30,546 by way of brokerage. It was contended on behalf of the assessee that in effecting the sales o f the shares and stocks, brokerage would have to be paid. The Wealth Tax Officer disallowed the claim in this respect on the ground that there was no provision for deducting the brokerage commission.

4. In Part IV of the return filed by the assessee, he mentioned the value of jewellery intended for personal use to be Rs. 27,27.330. It was claimed that as the said jewellery was intended for personal use, it should not be taken into account for computing the total wealth of the assessee. The assessee sought to bring his case under Section 5 (1) (viii) of the Act. The Wealth Tax Officer rejected this claim of the assessee on the ground that the aforesaid clause did not cover jewellery.

5. The assessee had held zamindari estate which was acquired by the Government under the Bihar Land Reforms Act. The assessee was to receive a sum of Rupees 36,87,419 from the Government of Bihar as compensation in that connection. The assessee claimed that the compensation payable to him could not be included in his total wealth because it was not known as to when and in what manner the amount would be paid. The Wealth Tax Officer held that the right to receive compensation represented a valuable asset which had to be included in the total wealth of the assessee. As the whole of the compensation had not yet been paid up to the date of the valuation, the Wealth Tax Officer estimated the value of the compensation to be 75 per cent. of its face value. Rs. 27,65,564 were accordingly included on that account in the total wealth of the assessee.

6. On appeal the Appellate Assistant Commissioner affirmed the decision of the Wealth Tax Officer on the three questions mentioned above. The Appellate Assistant Commissioner also held that the items of jewellery could be considered only under Section 5 (l) (xv) of the Act and not under any other provision. On further appeal to the Income-tax Appellate Tribunal, the Tribunal rejected the claim of the assessee for deduction on account of brokerage commission. So far as the jewellery was concerned, the Tribunal dealt with the submission made on behalf of the assessee that CL (xv) of Section 5 (1) of the Act had been deleted by the Finance Act of 1963 and observed that as long as that clause was in the statute book, that clause governed the e