Narasimham, C.J:— This is a reference under sub-section (1) of Section 27 of the Wealth Tax Act, 1907 (hereinafter referred to as the Act), by the Income-tax Appellate Tribunal, Patna, stating the following questions of law for the opinion of this Court:

“1. Whether, in computing the market value of the shares, the assessee is entitled to the deduction of a sum of Rs. 2,30,546 by way of brokerage commission?

“2. Whether, on a true construction of sections 5(1)(viii) and 5(1)(xv) of the Wealth-Tax Act, the assessee is entitled to the exclusion of the value of jewellery amounting to Rs. 27,27,330 from the computation of his total wealth?

“3. Whether any part of the amount of Rs. 36,87,419 fixed as compensation payable to the assessee under the Bihar Land Reforms Act is liable for inclusion in the total wealth of the assessee?”

2. The assessee was the late Maharajadhiraj of Darbhanga. While computing his net assets for the purpose of the Wealth Tax Act, a dispute arose in respect of (1) the deduction from the market value of the hares held by the assessee of the brokerage commission (question No. 1), (2) complete exclusion from the assets of those ornaments and jewellery of the Darbhanga Raj which were intended for the personal or household use of the Maharajadhiraj (question No. 2), and (3) the exclusion from the total assets of any part of the amount of compensation which was not actually paid to him by the State (question No. 3). Question No. 3 — Mr. Lalnarayan Sinha for the assessee, quite fairly, stated that, in view of a Bench decision of this Court in Maharajkumar Kamal Singh v. Commissioner Of Wealth-Tax., Bihar, AIR 1906 Pat 282, this question must be answered against the assessee. In that decision, it was held that, as soon as the estate of an ex-proprietor vests in the Government under the provisions of the Bihar Land Reforms Act, that proprietor is entitled to receive compensation, though the date of payment of the compensation and the manner in which it will be paid have been left to the discretion of the State Government. Hence, merely because the sum of Rs. 36,87,419 payable to the assessee for the vesting of his estate with the State Government has not yet been paid and there is likely to be much delay in paying the same, that sum cannot be deducted from his assets for the purpose of the Wealth-Tax Act. The Bench decision is binding on us, and this is not a fit case to refer the question to a larger Bench. Hence, Mr. Lalnarayan Sinha, while reserving the right to challenge the correctness of the decision before a superior Court if and when the occasion may arise, conceded that this question should be answered against the assessee.

3. Question No. 1—The assessee was holding shares and stocks in various limited companies. While correctly quoting the value of these shares and stocks as given in the Stock Exchange quotation and the quotation furnished by well-known share brokers, the assessee claimed deduction of a sum of Rs. 2,30,546 by way of brokerage commission. This was, however, disallowed by the Department on the ground that sub-section (1) of section 7 did not permit of any deduction of brokerage commission. That sub-section may now be quoted:

“7. (1) Subject to any rules made in this behalf, the value of any asset, other than cash, for the purposes of this Act, shall be estimated to be the price which in the opinion of the Wealth-Tax Officer it would fetch if sold in the open market on the valuation date.”

4. The question for consideration is the correct interpretation of the words “price it would fetch if sold in the open market”. Do they mean the quoted price or else the net price receivable by the seller? Mr. Sinha produced before us the Investors India Year Book 1945-47 compiled by Place, Siddons and Gough in which it is stated that, in accordance with the rules and regulations of the Calcutta Stock Exchange Association Limited, the buyer of shares “pays brokerage, this being included in the contract price and not shown as a separate item”. Mr. Sinha, therefore, contended that, in accordance to the well-established commercial usage in respect of sales of stocks and shares, the contract price includes the brokerage, and, consequently, the price quoted at the Stock Exchange should be held to include the brokerage also, and that such brokerage must be deducted in estimating the price which the stocks and shares would fetch in the open market he has, however, not been able to cite any authority in support of this contention. On the other hand, the English decisions are all against him. In Green on Death Duty, 6th Edition: at page 393, while discussing the principal value of stocks and shares for the purpose of death duty, it is observed:

“The price which property ‘fetches’ is the gross price paid by the purchaser, without deduction for the vendor's costs and expenses.”

5. The language of the relevant statutory provision in force in Britain is:

“Principal value means the price which the property would have fetched on the death of the deceased in the open market”.

6. It will be noticed that this language is very similar to section 7(1) of the Act, and the aforesaid observation would, therefore, apply with equal force.

7. It was, however, urged that the net price which would be actually received by the seller (the assessee) should alone be taken into consideration for the purpose of computing the assets. This may be an equitable view; but, as is well known, in construing taxation statutes, equitable considerations are out of place. The Legislature seems to have laid down an arbitrary rule that the actual price meaning the gross price), which the stocks and shares would fetch, if sold in the open market, should alone be taken into consideration irrespective of the necessary expenses, such as brokerage, stamp duty, etc., which may have to be incurred by the seller. The word “fetch” in the context must mean the quoted price only, and brokerage and other inevitable expenses incurred by the seller will have to be ignored. This question also must, therefore, be answered against the assessee.

8. Question No. 2—The assessee, in his statement furnished to the Wealth-Tax Officer, classified his jewellery into three groups:

(a) General jewellery — value Rupees 5,58,207

(b) Gold and silver — value Rupees 50,50,127

(c) Jewellery intended for his personal use — value Rs. 27,97,330.

9. He claimed complete exemption for the jewellery intended for personal use, relying on clause (viii) of sub-section (1) of section 5 of the Act, which is as follows:

“5. (1) Wealth tax shall not be payable by an assessee in respect of the following assets, and such assets shall not be included in the net wealth of the assessee—

“(viii) furniture, household utensils, wearing apparel, provisions and other articles intended for the personal or household use of the assessee;”

10. The Wealth-Tax Department, however, disallowed this claim, relying on clause (xv) of sub-section (1) of section 5 of the Act which was as follows:

“jewellery belonging to the assessee, subject to a maximum of twenty-five thousand rupees in value:”

11. It was held by the Wealth-Tax authorities that, inasmuch as jewellery was separately dealt with in clause (xv), the assessee was entitled to deduction of Rs. 25,000 only out of the total value of the jewellery, and, for the balance, he was bound to pay wealth tax. He had in fact, made the said deduction in his statement furnished to the Department. They further held that the special provision of clause (xv) will override the general provision of clause (viii) if there is an inconsistency between the two, and that, consequently, the words “other articles intended for the personal or household use of the assessee”, occurring in cl. (viii) should be so construed as excluding jewellery even though, due to family custom or other reasons, some of these ornaments might have been intended by the assessee for his personal use. I should, however, mention here that clause (xv) of sub-section (1) of section 5 has been deleted by Finance Act, 1963: but we are concerned here with the law as it stood prior to that amendment.

12. There can be no doubt that a premier zamindar in the State of Bihar as the assessee may have kept in his possession several ornaments which were intended for his persona use. It may also be true, as urged by Mr. Lalnarayan Sinha for the assessee, that some other ornaments, including precious stones, might have been kept by the assessee not for personal use but solely as capital kept in a convenient form. He, therefore, urged that the Wealth-Tax authorities should not have rejected totally the claim of the assessee but should have examined every item of the jewellery with a view to decide whether it was intended for personal use, and then decided whether to apply clause (viii) or clause (xv).

13. So far as wearing apparel is concerned, there may be some difficulty. In clause (e) of sub-section (1) of section 33 of the Estate Duty Act, 1933, the Parliament took special care, while exempting such apparel, to qualify the exemption by these words:

“(e) wearing apparel, but not including any precious or semi-precious stones or ornaments worked or sewn into the wearing apparel.”

14. With this knowledge, when the Parliament passed the Wealth-Tax Act in 1957 (four years later), it, in clause (viii), exempted wearing apparel completely without adding any of the qualifying words found in the corresponding provision of the Estate Duty Act. It may, therefore, be reasonably contended that, even if precious or semiprecious stones or ornaments are worked or sewn into the wearing apparel, such jewellery would be completely exempted by virtue of clause (viii) on the ground that they form part of the wearing apparel. But, here, there is no finding by any of the tax authorities, nor was it expressly claimed by the assessee at any stage of the assessment proceeding, that some of the jewellery, at any rate, should be deemed to form part of the wearing apparel, inasmuch as they were worked or sewn into the wearing apparel. I am not, therefore, called upon to decide this question.

15. Exemption has been claimed solely on the ground that jewellery of the value of Rs. 27,27,330 was intended for the personal use of the assessee. In deciding this question, it will be helpful to scrutinise the history of the legislation leading to the insertion of clauses (viii) and (xv) in sub-section (1) of section 5 of the Act. The strict rule of British law that history of legislation and the reports of the Select Committees preceding the passing of a Bill should not be looked into for the purpose of construing statutes has not been followed in some of the recent decisions of their Lordships of the Supreme Court in India. On the other hand, thev have followed the American view referred to by Crawford (in Statutory Construction at page 382) where a distinction was made between Legislative Debates on the one hand and reports of the Legislative Committees on the other. The learned author points out that, though debates may be inadmissible for the purpose of construction, the reports of the Committees “do possess a more reliable or satisfactory source of assistance”. These Committee announcements do not of course carry the weight of a judicial opinion, but are rightfully regarded as possessing very considerable value of an explanatory nature regarding the legislative intent where the meaning of a statute is obscure”. Thus, in re, Central Provinces and Berar Act No. XIV of 1938, 1939 F.C.R 18 at p. 40 : (AIR 1939 FC 1 at pp. 8–9) the White Paper and the Report of the Joint Select Committee thereon were referred to while construing some provisions of the Government of India Act, 1935. Similarly, in Gopalan's case, AIR 1950 S.C 27 at p. 88 the report of the Drafting Committee was referred to “not to control the meaning of the Article, but may be seen in case of ambiguity”.

16. In the welknown case In re. Hamlin, 220 N.Y 407, it was observed:

“Reports of legislative committees having in charge the preparation of proposed laws may be consulted, as a source of information in the endeavour to ascertain the legislative intent, in a situation where the meaning of the statute is doubtful…… Amendments or modifications of a Bill, and the action of the Legislature thereon, may serve as guides on the meaning of a doubtful law.”

17. When the Wealth-Tax Bill was placed before the Parliament (Bill No. 14 of 1957), there was no clause corresponding to cl. (xv); but, on the other hand, in sub-clause (vi) of cl. (5) of the Bill, “jewellery,” was included as follows:

“Domestic animals and furniture, household utensils, wearing apparel, jewellery, provisions and other articles intended for the personal or household use of the assessee, subject to a maximum of twenty-five thousand rupees in value: The Select Committee, however, recommended the omission of” jewellery from clause (vi) in the following terms (vide the Report of the Select Committee published in the Gazette of India Extraordinary, dated the 17th August, 1957):

“Item (ix) (Original item (vi)). The Committee are of opinion that there should be total exemption for household assets other than jewellery and in the case of jewellery exemption upto the value of twenty-five thousand rupees should be provided.”

18. It was in pursuance of this recommendation of the Select Committee that clause (xv) was inserted in sub-section (1) of Section 5, treating jewellery separately and limiting its exemption to a maximum of Rs. 25,000 only. The other matters dealt with in clause (viii) were exempted completely irrespective of the value. If “jewellery” had remained in sub-clause (vi) of clause (5) of the Bill, there would have been no difficulty in interpretation, because, if, in the same sub-clause “jewellery” and other articles intended for the personal or household use of the assessee” are used, the obvious inference is that “other articles”, referred to in that sub-clause, do not include “jewellery”. Merely because, on the report of the Select Committee, “jewellery” was taken out of original sub-clause (vi) and inserted as an independent sub-clause, a different principle of interpretation cannot be adopted. The only object of inserting a separate clause dealing with “jewellery” was obviously to fix an exemption limit of Rs. 25,000 for “jewellery” and not to fix any such limit for the “other Srticles” described in original sub-clause (vi) [now clause (viii)].

19. Thus, the history of the legislation shows that the Parliament did not intend to include some clauses of jewellery within the scope of the words “other articles intended for the personal use of the assessee” in clause (viii) of sub-section (1) of section 5 of the Act.

20. The Parliament was fully aware that assessees for the purpose of the wealth-tax are generally very rich persons who may be retaining some ornaments and jewellery for their personal use. With this knowledge, the Parliament took special care to provide a separate clause for jewellery, and fixed a maximum amount of exemption for jewellery. The reasonable inference, therefore, seems to be that all clauses of jewellery excluding perhaps ornaments and precious stones sewn or worked into the wearing apparel would be outside the scope of clause (viii) altogether, and should be dealr with only under clause (xv).

21. In my opinion, therefore, both on the principle of statutory construction that a special provision must override the general provision and also on a careful scrutiny of the history of legislation dealing with the insertion of clauses (viii) and (xv) in sub-section (1) of Section 5, the view taken by the Wealth-Tax authorities must be held to be correct.

22. I would, therefore, answer the three questions as follows:—

Question No. 1—The answer is in the negative. The brokerage commission cannot be deducted from the market value of the shares.

Question No. 2—The answer is in the negative. The assessee is not entitled to exclusion of the value of the jewellery, even though such jewelery may be intended for his personal use. The only exemption he could claim is up to the limit of Rs. 25,000, as permitted in clause (xv).

Question No. 3—The answer is in the affirmative. The compensation payable to the assessee under the Bihar Land Reforms Act is liable for inclusion in his total wealth.

23. The petitioner must pay costs of Rs. 200 to the opposite party.

24. B.N Jha, J.:— I agree.

BDB/D.V.C

25. Answer accordingly.