Commissioner Of Wealth-Tax vs Smt. Savitri Devi
1981 Latest Caselaw 441 Del

JUDGMENT

Leila Seth, J.

1. These fourteen references pertain to the assessment years 1964-65 to 1970-71. The relevant valuation dates are 31st March, 1964, 31st March, 1965 and so on for the several assessment years respectively. The assesseds, Dr. Roshan Lal and his wife, Smt. Savitri Devi are the owners of a house at 83, Malcha Marg, New Delhi. The common questions pertaining to both the assesseds that have been referred for our opinion are as follows :

"1. Whether, on the facts and in the circumstances of the case, the 50% unearned increase in land in respect of Malcha Marg property stood diverted to the Govt. by an overriding title and would not form part of the wealth of the assessed ?

2. Whether, on the facts and in the circumstances of the case, the 50% unearned increase aforesaid would be a 'debt owed' within the meaning of Section 2(m) of the Act and as such deductible in arriving at the net wealth of the assessed ?"

2. It is conceded by counsel for the applicant that the first. question is no longer res Integra. It is concluded by the decision of the Supreme Court in CWT v. P.N. Sikana [1977] 107 ITR 922. In accordance with the said decision, the first question has to be answered in the affirmative and in favor of the assesseds. This would mean that 50 per cent. of the unearned increase in the value of the land would be diverted to the Lesser before it reached the hands of the assesseds as part of the price. In these circumstances, question No. 2 does not arise.

3. In the case of Smt. Savitri Devi a further question has been raised pertaining to gold ornaments and silver utensils. The value of the gold ornaments and silver utensils possessed by her during the relevant assessment years is as follows :

Assessment year Value of gold ornaments Value of silver utensils

Rs.

Rs.

1964-65 7,930 3,750

1965-66 8,723 3,990

1966-67 10,462 5,040

1967-68 11,498 4,970

1968-69 7,229 5,997

1969-70 8,283 5,580

1970-71 (As shown figures not specified in the assessment order).

4. The assessed claimed that both the gold ornaments as well as the silver utensils were to be exempt from her total wealth, in view of the provisions of Section 5(1)(viii) of the W.T. Act, 1957 (to be referred to in short as "the Act"). However, the WTO treated the gold ornaments and silver utensils as "jewellery" and included them in the valuation of her wealth for the relevant assessment years.

5. The assessed being aggrieved appealed to the AAC, who allowed her appeals. He held that as the gold ornaments and silver utensils were not studded with precious stones, they were exempt by virtue of the Explanation to Section 5(1)(viii) of the Act, introduced by the Finance (No. 2) Act, 1971.

6. On appeal by the Revenue to the Wealth-tax Appellate Tribunal, the orders of the AAC on this aspect were affirmed.

7. At the instance of the Commissioner of Wealth-tax, a question has now been referred for our consideration which reads :

"Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that gold ornaments and silver utensils, which were not studded with any precious or semi-precious stones and were intended for the personal use of the assessed, were exempt under Section 5(1)(viii) of the Wealth-tax Act, 1957 ?"

8. In order to appreciate the contentions, it is necessary to set out certain provisions of the Act. Section 5(1)(viii) before it was amended by the Finance (No. 2) Act of 1971 was as under :

"5. (1) Subject to the provisions of Sub-section (1A), wealth-tax shall not be payable by an assessed in respect of the following assets, and such assets shall not be included in the net wealth of the assessed--...

(viii) furniture, household utensils, wearing apparel, provisions and other articles intended for the personal or household use of the assessed."

9. By the Finance (No. 2) Act of 1971, the following words were added after the existing Clause (viii):

"but not including jewellery".

10. These words though inserted by the said Act of 1971 were to take effect retrospectively from 1st April, 1963. Two provisos and Explanations were also added to this Sub-clause but with prospective effect, that is, as from 1st April, 1972. The pertinent proviso and Explanation are set out:

"Provided that the furniture, utensils or other articles are neither made wholly or partly, of, nor contain (whether by way of embedding, covering or otherwise), gold, silver, platinum or any other precious metal or any alloy containing one or more of such precious metals :

Explanation 1.--For the purposes of this clause and Clause (xiii), 'jewellery' includes-

(a) ornaments made of gold, silver, platinum or any other precious metal or any alloy containing one or more of such precious metals, whether or not containing any precious or semi-precious stone, and whether or not worked or sewn into any wearing apparel;

(b) precious or semi-precious stones, whether or not set in any furniture, utensil or other article or worked or sewn into any wearing apparel."

11. As the above-noticed Explanation and proviso are prospective and came into effect only from 1st April, 1972, they are not really relevant for the purposes of the assessment years before us. But they have been set out in order to appreciate the arguments. As such, it is only with the words "but not including jewellery" (which have been given retrospective effect) that we are concerned. They were introduced, as is well known, to counteract the effect of the decision of the Supreme Court in CWT v. Arundhati Balkrishna [1970] 77 ITR 505. Thus jewellery for personal use

has been excluded from the exemption under Clause (viii) with effect from 1st April, 1963; whereas the legislatively extended definition of jewellery as per Expln. 1 has come into operation only from 1st April, 1972. The short question, therefore, before us is, what is the meaning to be given to the word "jewellery" before it was statutorily defined with effect from 1st April, 1972.

12. Mr. Lalwani, appearing for the Revenue, contends that gold ornaments are "jewellery" as understood in common parlance and, therefore, not exempt even before 1st April, 1972. He, however, concedes, in our opinion rightly, that silver utensils cannot in common usage be considered as "jewellery".

13. The point in issue is, what is "jewellery" as commonly understood ? Is a gold ornament a piece of jewellery ? Or must it be studded with precious or semi-precious stones to so qualify, as had been the assessed's contention ?

14. In the Random House Dictionary, College Edn., 1977 reprint, at p. 719, "jewellery" is defined as :

"1. a number of articles of gold, silver, precious stones, etc., for personal adornment,

2. any ornament for personal adornment, as a necklace, cufflinks, etc.

3. jewels collectively."

15. In the Shorter Oxford English Dictionary (3rd Edn., re-set in 1973--etymologically), at p. 1132, the meaning of the word "jewellery" is set out as under :

"jewellers' work; gems or ornaments made or sold by jewellers; jewels collectively, or as a form of adornment."

16. The word "jewel" has also been defined in the said dictionary at the same page, which reads as:

"1. An article of value used for adornment, usu. of the person; a costly ornament, esp. one made of gold, silver, or precious stones."

17. The Words and Phrases, Permanent Edn., Vol. 23, at p. 34, also contains an interesting passage, which is as follows :

"The word 'jewellery' is generally used as including articles of personal adornment, and the word imports that the articles are of value in the community where they are used. A belt of cowry shells, a necklace of bears' claws, a head ornament of sharks' teeth, though possessing no value in themselves, are esteemed valuable in the communities where they are worn; and we, therefore, constantly find them referred to in books written in the English language--..."

18. It would appear to us that the word "jewellery" in common parlance especially in India would certainly include ornaments for personal adornment that are made from gold irrespective of whether they are studded with precious stones or not. When an Indian girl talks of her jewellery, she certainly means to include therein her gold bangles, chain, anklets, etc., even though they are not studded with precious or semi-precious stones. The difference sought to be made out between the two appears to us to be artificial. We are also supported in our view by certain decisions of the Punjab & Haryana, Gujarat and Allahabad High Courts. In CWT v. Rajeshwar Prashad [1975] Tax LR 194, a Division Bench of the Punjab & Haryana High Court held that jewellery is not a term of art. What has to be seen is whether the articles fall within the ambit of the term "jewellery". If the ornaments are of gold and are meant for wearing on the person, they would be jewellery within the meaning of Clause 5(1)(viii); no playing on words would take them out of that category ; their value cannot be excluded from the assets of the assessed.

19. In CWT v. Jayantilal Ammtlal [1976] 102 ITR 105, the Gujarat High Court has held that the natural meaning of the term "jewellery" is clear enough to include gold ornaments; and it is only by way of greater caution that the ornaments of gold, etc., have been included along with other articles such as furniture, apparel, etc., studded or sewn with jewels in the inclusive prospective definition of Expln. 1.

20. In CWT v. His Highness Maharaja Vibhuti Narain Singh [1919] 117 ITR 246, the Allahabad High Court has held that there is no material difference between jewellery and ornaments in the context that one is studded with precious stones and the other is not. That court has held that the word "jewellery" as commonly understood includes such ornaments. To that extent the explanation only makes explicit what was implicit.

21. Before parting with the case we feel it is necessary to notice the decisions of the Orissa, Calcutta and Madhya Pradesh High Courts which have taken a contrary view.

22. In CWT v. Binapani Chakraborty [1978] 114 ITR 82, the Orissa High Court has held that in view of the fact that Expln. 1 has no retrospective affect, gold ornaments without precious or semi-precious stones cannot be treated as jewellery prior to 1st April, 1972, and their value cannot be included in the net wealth of the assessed for the assessment years 1965-66 to 1967-68. We feel that there is no discussion in this case about the meaning of the word "jewellery" as understood in common parlance. The court has proceeded on the assumption that as the word "jewellery" was not defined retrospectively it would not take into its ambit gold ornaments which did not contain precious or semi-precious stones.

23. In CWT v. Aditya Vikram Birla [1978] 114 ITR 711, the Calcutta High Court has followed the abovementioned decision of the Orissa High Court and dissented from the decision in Jayantilal Amratlal [1976] 102 ITR 105 of the Gujarat High Court. The Calcutta High Court has held that the dictionary meaning of the word "jewellery" is not so wide or clear as to bring in all valuable ornaments within its fold. According to it, in popular parlance, the word "jewellery" connotes use of stones, precious, semi-precious or even imitation in the ornaments concerned. Furthermore, in considering this word it would not be safe to go only by the original or modern English meaning. The use of ornaments and jewellery in our country and the specific connotation of various types of jewellery in use in the country and described in various local languages has to be considered. In Hindustani and Bengali at least a clear distinction has been made between ornaments which are made of gold or silver or ornaments which are set with stones. The court felt that if they accepted the contention of the Revenue that the ordinary meaning of the term "jewellery" always included all ornaments made out of precious metals with or without stones then the introduction of Expln. 1 to Section 5(1)(viii) with prospective effect would be redundant and absurd. It felt that if the Explanation was clarificatory and added for reasons of greater caution then it should have been made retrospective as was the main amendment and not prospective.

24. In CWT v. Smt. Sonal K. Amin [1981] 127 ITR 427, the Madhya Pradesh High Court has followed the decisions of the Orissa High Court in Binapani Chakraborty [1978] 114 ITR 82 (Orissa) and the Calcutta High Court in Aditya Vikram Birla ,

25. We do not agree. We feel that the word "'jewellery" as set out in the dictionaries as above-noticed and as understood in common parlance, certainly includes gold ornaments. Gold ornaments made for personal use are almost always a jeweller's job and cannot be made by just anyone. A jewel itself is a costly ornament especially one made of gold, silver or precious stones. Precious stones are not a necessary ingredient to make a piece of jewellery. Exquisite filigree gold and silver jewellery is made in Orissa and other parts of the country and can certainly hot be made by any one other than an expert jeweller. The Hindi word for jewellery "gehena" would certainly include such jewellery within its ambit. It is unthinkable that a gold "champakali" or a "hanali" or a wedding ring is not jewellery just because it is not studded with stones. It would appear to us that there is nothing redundant or absurd in the Explanation being prospective. The terms of the Explanation cannot take away the ordinary meaning of the word "jewellery". In any case, the Explanation does not deaf with gold ornaments only but also elucidates, inter alia, that even if

gold ornaments, etc., are sewn into any wearing apparel they would be jewellery ; this is certainly an extended meaning of the word and not one as used in common parlance ; similar is the position with regard to precious or semi-precious stones whether set in any furniture, utensil or other article or worked or sewn into any apparel or not. The artificially enlarged meaning as extended by the prospective definition provided for in Expln. 1 above-mentioned also includes by way of abundant caution the natural meaning of the term. It has apparently been included so that the common parlance meaning should not escape attention.

26. For the reasons outlined above, we decide the question as follows :

The Tribunal was justified in holding that silver utensils were not jewellery for the relevant assessment years and were exempt under Section 5(1)(viii) of the Act. However, the gold ornaments which were intended for the personal use of the assessed were jewellery and were not exempt under Section 5(1)(viii) of the Act because of the retrospective amendment of the main clause.

27. No one is appearing for the assessed. In these circumstances, we make no order as to costs.