JUDGMENT

TULZAPURKAR, J.:— The common question of law that arises for our determination in these appeals is :

Whether on the facts and in the circumstances of the case, the right or interest of an assessee in an annuity policy is exempt from wealth-tax under S. 5(1)(vi) of the Wealth-tax Act, 1957?

2. The facts giving rise to the question are briefly these. Yuvraj Amrinder Singh and Princess Rupinder Kumari are individual assessee being assessed to wealth-tax under the Wealth-tax Act, 1957 (hereinafter called the Act). As regards the former the two assessment years are 1964-65 and 1965-66 for which the respective valuation dates are 31-3-1964 and 31-3-1965, whereas the assessment year in the case of Princess Rupinder Kumari is 1965-66 for which the valuation date is 31-3-1965. The two assessees had purchased one annuity policy each and they claimed exemption in respect of the value of each policy in each ones assessment to wealth-tax under S. 5(1)(vi) of the Act. The value of the annuity policy in the case of Yuvraj Amrinder Singh was Rs. 2,13,000/- while in the case of Princess Rupinder Kumari it was Rs. 2,35,176/- Exemption in respect of such value was claimed under S. 5(1)(vi) of the Act inasmuch as the annuity policies fell within the expression "any policy of insurance" occurring in the said provision.

3. The Wealth-tax Officer rejected the claim and included the above mentioned amounts the assessees net wealth for the concerned assessment years on the ground that the exemption was allowable only to insurance policy whereas the policy taken out by the assessee was an annuity policy whereunder the assessee had made lump sum payment and he would be getting periodical returns after the lapse of a number of years and as such annuity policy could not be considered as insurance policy. Aggrieved by the orders passed by the Wealth-tax Officer the assessees preferred appeals to the Appellate Assistant Commissioner who allowed their appeals holding them to be entitled to exemption under S. 5(1)(vi) as according to him annuity policies were covered by the term "any policy of insurance" used in the said subsection. This view of the Appellate Assistant Commissioner was confirmed by the Income-tax Appellate Tribunal in appeals preferred by the Revenue. In the three Wealth-tax References Nos. 2, 3 & 4 of 1972 made to the High Court by the Tribunal at the instance of the Revenue the High Court confirmed the Tribunals view and answered the question set out above (which arose in each Reference) in favour of the assessee. The Revenue has come up in appeals challenging the view taken by the High Court.

4. Since the question raised in these appeals concerns the proper construction of the expression any policy of insurance occurring in S. 5(1)(vi) of the Act read with the other connected provisions thereof in relation to the terms of the annuity policies purchased by the two assessees it will be desirable to set out the terms of the two annuity policies. In each the annuitant is the proposer and each contains a provision for commutation, that is to say, neither is a noncommutable policy. It may be stated that the terms and conditions of both the annuity policies are the same and hence the terms and conditions of one (of Yuvraj Amrinder Singh) may be set out which are as follows :

"Type of Annuity : Deferred annuity without profits guaranteed for 35 years.

Date on which the annuity vests : Twenty-second day of January, Nineteen hundred and sixty four.

Event on the happening of which annuity ceases or determines : On expiry of 35 years calculated from the date on which the annuity vests or at the death of annuitant, if later.

To whom annuity payable : To the annuitant.

Dates when annuity payable : On the stipulated due date of the 1st Annuity instalment and monthly thereafter.

Special provisions :

(1) If the annuitant shall die before the date on which the annuity vests, the amount of the single premium paid but without any interest shall be returned