COMMISSIONER OF WEALTH TAX Vs. JOSE MATHEW

JUDGEMENT

(1.) The Income Tax Appellate Tribunal has referred the following questions of law, for the decision of this Court, at the instance of the Revenue, in ITR Nos. 20 to 23 of 1983:

(2.) Sole question that arises for consideration is whether for the actual share or quantum attributable to the respondents/assessees in the agricultural properties of the firm, the assessees can claim exemption under S5(1)(iva) of the Wealth Tax Act. Though the agricultural land belongs to the firm, really it is the partners who are the owners of the said land. After adverting to the decision of the Supreme Court in Narayanappa v. Bhaskara Krishnappa ( AIR 1966 SC 1300 ), and also the decision in CIT v. R. M. Chidambaram Pillai [(1917) 106 ITR 292] and other relevant decisions, a Bench of the Karnataka High Court in the decision reported in Commissioner of Wealth Tax v. Mrs. Christine Cardoza [(1978) 114 ITR 532] held that in computing the net wealth of an assessee, who was a partner in a firm which owned agricultural lands, the value of the share of the assessee in agricultural lands will have to be included in his net wealth and the full deduction under S.5(1)(iva) should be given in his hands. We perused through the said decision. We concur with the same. The Appellate Tribunal has referred to the said decision of the Karnataka High Court as also a few other decisions which have followed the said decision. We are of the view that the decision of the Appellate Tribunal holding that the respondents/assessees, who are partners in a firm which owned agricultural lands, are entitled to exemption pleaded under S.5(1)(iv-a) of the Wealth Tax Act in computing their net wealth.

(3.) In this view of the matter, we answer the questions, referred to us in ITR Nos. 20 to 23 of 1983, in the affirmative in favour of the assessee and against the Revenue. We answer the question, referred to us in ITR Nos. 212 to 214 of 1984, in the affirmative in favour of the assessee and against the Revenue.