COMMISSIONER OF WEALTH-TAX versus SMT. HASHMATUNNISA BEGUM

Citation: [1989] 1 S.C.R. 155 · Decided: 17-01-1989 · Supreme Court of India · Bench: R.S. PATHAK · Disposal: Disposed off
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Judgment (excerpt)

COMMISSIONER OF WEALTH-TAX 
v. 
SMT. HASHMATUNNISA BEGUM 
JANUARY 17, 1989 
[R.S. PATHAK, CJ & M.N. VENKATACHALIAH, J.) 
Wealth Tax Act, 1957: Section 4(1)(a) Proviso-Wea/th tax-
Assets transferred by way of gift-Exemption-Whether gifts made 
before assessment year commencing after March 31, 1964 entitled to 
' benefit of exemption-For any assessmeni year commencing after 
March 31, 1964-lnterpretation of. 
Statutory Interpretation: Literal rule-Meaning of statute is 
plain-Court must apply regardless of result-Court not entitled to read 
statute in another way anxious to avoid its unconstitutionality. 
A 
B 
c 
Words and Phrases: 'lnterpretation'-'Construction'-Meaning D 
of. 
In Civil Appeal No. 1118 of 1975 the respondent-assessee's 
l_ 
husband gifted certain lands and buildings to bis two spouses by three 
gift deeds dated 26.4.1962, 26.5.1962 and 17.8.1962. The gifts were 
chargeable to gift-tax and were accordingly assessed to gift-tax In the 
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assessment year 1963-64. 
In the proceedings for assessment to wealth for the assessment 
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. year 1967-68, It was claimed on behalf of the estate of the assessee's 
__ 
. hhusbandb, who had later died on 16.12.1968 that as the gldfts dwere 
c argea le to gift-tax, the proviso to s. 4(1)(a) was attracte an the 
F 
assets so transferred were not lncludlble In the net wealth of the 
deceased for any assessment year commencing after the 31st day of 
March, 1964. The Wealth Tax Officer rejected this claim. On appeal, 
the Appellate Assistant Commissioner conftnned the assessment. 
Allowing the assessee's further appeal, the Appellate Tribunal, 011 a 
particular construction of the proviso, held that the assets transferred, G 
which had attracted gift-tax, were not lncludlble In the net wealth of the 
deceased for the assessment year 1964-65 onwards. 
On Ii reference made at the Instant of the Revenue, the Bish Court 
agreed with the construction placed on the proviso by the Tribunal. The 
Revenue ftled an appeal, by Special leave In this Court. 
H 
155 
A 
B 
156 
SUPREME COURT REPORTS 
(1989) 1 S.C.R. 
The appeUant-assessee in Civil Appeal Nos. 1226 and 1227 of 
1975, made a gift of certain amount to her minor daughter on 
7.10.1959. The assets so transferred were included in the assessee's 
wealth for the two assessment years 1964-65 and 1965-66 under s. 
4(1)(a)(ii) of the Wealth-tax Act. The claim of the assessee that the 
proviso to s. 4(1)(a) operated to exclude the asset from the net wealth of 
the assessee as the transfer was chargeable to gift-tax was not accepted 
by the Wealth-tax Officer. The Appellate Assistant Commissioner 
rejected the assessee's appeal. 
However, the Appellate Tribunal, accepting the contention of the 
assessee, allowed the assessee's appeal and held that, on a true construe· 
lion of the proviso, so long as the gift was chargeable to or exempt under 
C s. 5 from gift-tax, to that extent s. 4(l)(a) ceased to have operation and 
the statutory fiction embodied in it was not attracted and that since, the 
gift was chargeable to gift-tax, at the relevant time, the exemption was to 
operate from the assessment year commencing after 31-3-1964. 
The High Court, on a reference made at the instance of the 
D Revenue reversed the Tribunal's view. Hence, the assessee filed the 
appeal, by certificate, in this Court. 
In the appeals before this Court, it was submitted on behalf of the 
Revenue that the words "for any assessment year commencing after the 
31st day of March, 1964" could, in the context only refer to the gift and 
£ 
gift-tax assessments, that only that class of gifts which were chargeable 
to gift tax for any assessment year 1964-65 or thereafter (hut subject to 
the time limit fixed by the 1971 amendment) which would otherwise fall 
under s. 4(1)(a) were eligible for the benefit of exemption, and that 
where the enactment was clear and admitted of only one meaning, and 
did not admit of two or more meanings, it would be the plain meaning 
F 
that should be given effect to and no resort could be had to any rules of 
construction which would denude the provision of its plain and or-
dinary meaning. 
On behalf of the assessees, it was contended that the date of the 
gift was immaterial and as long as the transfer was chargeable to gift 
G tax or was exempted under s. 5 whatever may be the year in which the 
gift was made, the exemption from a gift-tax must commence for any 
assessment year commencing after the 31st day of March 1964", tha
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