The exemption under Section 5(1A) of the Wealth-tax Act, 1957, is permissible only to the limit of Rs. 1,50,000 for the assets specified in Section 5(1A), and anything in excess of Rs. 1,50,000 will not be entitled to exemption. The proviso to Section 5(1A) applies only when the value of the assets referred to in Clauses (xv) and (xvi) of Section 5(1) exceeds Rs. 1,50,000.

Ajit K. Sengupta, J.

1. IN this reference under Section 27(1) of the Wealth-tax Act, 1957, for the assessment years 1972-73 to 1975-76, the following questions of law have been referred to this court :

"1. Whether, on the facts and in the circumstances of the case, under the proviso to Section 5(1A), the raising of the exemption limit beyond Rs. 1,50,000 could be made only if the assets referred to in Sections 5(1)(xv) and 5(1)(xvi) of the Wealth-tax Act, 1957, exceed Rs. 1,50,000 ?

2. Whether, on the facts and in the circumstances of the case, the house property at 7/1, Queens Park or a part thereof can be said to belong to the assessee within the meaning of Section 5(1)(iv) of the Wealth-tax Act, 1957, where the assessee, admittedly, has only a life interest therein ?"

2. SHORTLY stated, the facts are that the assessee, an individual, held Government securities on the respective valuation dates as follows :

Valuation date Amount(Rs.)

31-3-1972 47,260

31-3-1973 50,020

31-3-1974 30,000

31-3-1975 20,000

Apart from the aforesaid securities, the assessee also held shares of various companies. Exemption to the extent of Rs. 1,50,000 was granted by the Wealth-tax Officer in respect of the various shares. In addition to the above exemption, the assessee wanted further exemption with regard to the aforesaid Government securities in terms of Clauses (xv) and (xvi) of Sub-section (1) of Section 5 of the Wealth-tax Act, 1957. The Wealth-tax Officer did not allow the assessee's aforementioned claim as, in his opinion, the securities in question were covered by the overall limit of Rs. 1,50,000 indicated in Sub-section (1A) of Section 5 of the Wealth-tax Act, 1957, and that exemption in terms of Clauses (xv) and (xvi) of Sub-section (1) of Section 5 was not over and above the said ceiling limit of Rs. 1,50,000 indicated in Sub-section (1A) of Section 5. The Wealth-tax Officer also expressed the opinion that the provision of Sub-section (1) of Section 5 of the Wealth-tax Act, 1957, relied upon by the assessee was not attracted in the present case. Aggrieved by these assessments, the assessee brought the matter by way of appeals before the Appellate Assistant Commissioner who, following the decision of the Tribunal in the case of the assessee for the assessment year 1972-73, upheld the aforesaid claims of the assessee for the year under consideration. The Revenue, thereupon, appealed to the Tribunal against the aforesaid consolidated order of the Appellate Assistant Commissioner. Inasmuch as the facts for the year under consideration as well as the rival submissions of both the sides were identical to those which were the subject-matter of the decision of the Tribunal for the assessment year 1972-73, the Tribunal confirmed the order of the Appellate Assistant Commissioner for these years also. The Tribunal held that if the assets include assets referred to in Clause (xv) or Clause (xvi), they are exempt over and above the overall limit of Rs. 1,50,000.

3. THE assessee had transferred his property situated at No. 7/1, Queens Park to the trustees of the trust which was brought into being by him, vide trust deed executed on August 28, 1951. THE said trust was a revocable one. Under the said deed, the assessee, along with his wife and three sons, had equal rights of residence in the said property during his lifetime. THE Wealth-tax Officer on these facts held that the assessee had a life interest in the said property and, accordingly, he included the market value of the said life interest in the net wealth of the assessee for each of the years under consideration. THE assessee claimed that he was entitled to the exemption in terms of Clause (iv) of Sub-section (1) of Section 5 of the Wealth-tax Act, 1957, with regard to the aforesaid life interest in the property. This claim was, however, negatived by the Wealth-tax Officer. THE assessee, thereupon, appealed to the Appellate Assistant Commissioner who accepted the assessee's claim