1338. Whether properties left in erstwhile East Pakistan after Indo-Pak conflict of 1965 and relief granted in the form of ex gratia grant and as such asset includible in net wealth
The Board have considered taxation under the Wealth-tax Act of assessees in India in respect of their properties left in erstwhile East Pakistan after Indo-Pak conflict of 1965 and the relief granted to them in respect of such properties in the form of ex gratia grant from the Consolidated Fund of India and have decided as under :
The value of the properties left behind in East Pakistan by persons who had migrated to India, and which vested in the Custodian of Enemy Property in Pakistan, cannot be assessed to wealth-tax in India in the hands of such persons.
The ad hoc interim relief granted by the Government of India in the form of ex gratia grant from the Consolidated Fund of India cannot be assessed to wealth-tax as there is no legally enforceable claim to such relief.
Circular : No. 385 [F.No. 316/35/81-WT], dated 3-7-1984.
JUDICIAL ANALYSIS
EXPLAINED IN – The above circular was explained in Smt. Kamla Devi v. WTO [1986] 16 ITD 687 (Cal.), as follows :
“8. The Board’s Circular No. 385 dated 3-7-1984 clearly says that the ad hoc interim relief granted by the Government of India in the form of ex gratia grant from the Consolidated Fund of India cannot be assessed to wealth-tax as there is no legally or enforceable claim to such relief. This circular is not inconsistent with any provision of law and, therefore, the reliance placed on behalf of the department on the decision of the Supreme Court in the case of State Bank of Travancore v. CIT [1986] 158 ITD 102 (SC) is misplaced. In view of this circular also nothing is includible in the net wealth of the assessee in respect of the properties left in Pakistan or in respect of the alleged claim to receive relief from the Government of India under the aforesaid notice.” (p. 692)
