COMMISSIONER OF WEALTH TAX Vs. SARA VARGHESE

JUDGEMENT

(1.) At the instance of the Revenue, the following two questions of law have been referred for the decision of this Court:

(2.) The respondent in both these cases in an assessee to Wealth Tax. She is an individual. She owns 32 acres of land. Out of the above 32 acres, 26 acres ere covered by rubber plantations. In the other 6 acres there are trees like mangoes, coconuts, etc. There was also a building used as residence and as an office of the assessee. We are concerned with the assessment years 1973-74 and 1974-75. The Government of India by notification dated 6-2-1973 included Edappally within the limits of Cochin Corporation as urban land. On this basis the Wealth Tax Officer levied additional wealth tax on these lands. The respondent assesses contended that wealth tax was not leviable in respect of these assets since agriculture itself is business. It was claimed that the entire land in question is taken up by that business and so it is a "business asset". This plea was raised before the Appellate Tribunal. The Appellate Tribunal relied on the decision of the Punjab and Haryana High Court reported in Commissioner of Wealth Tax v. Hari Singh (123 ITR 558) and held that running of rubber estate is certainly a business and that the assessee would be entitled to exemption from payment of additional wealth tax in respect of the same. On motion by the Commissioner of Wealth Tax, the above questions of law have beep referred for the decision of this Court.

(3.) We heard counsel for the Revenue, Mr. Menon. The respondent was not represented before us. As per S.3 read with the Schedule Part I Para A Rule No. (2) read with Para B - Rule No.(1) of Part.1 - the net wealth of a person includes the value of any asset being building or land, or any right in such building or land situated in an urban area (referred to as urban asset), other than "business premises" as it stood then. The short question that arises for consideration is, whether the agricultural land and building, in the urban land (urban asset) will be "business premises" for the purpose of Para.B, Rule(1) of Part.1 and Rule (2) of Para.A, Part.1 of the 1st Schedule to Wealth Tax Act The Supreme Court in Konduri Buchirajalingam v. State of Hyderabad (9 STC 391) at page 401 held that a producer of crops may engage in the business of selling or supplying and become a dealer for the purpose of Sales Tax Act. Earlier, the Bombay High Court in Gir Dharilal Jiwanlal v. The Assistant Commissioner of Sales Tax (8 STC 732) held that the cultivation of land may be undertaken with the object or purpose of carrying on the business of selling and supplying agricultural produce and in that case the person concerned will be a dealer for the purpose of the Sales Tax Act. The word 'business' has not been defined in Wealth Tax Act. In such circumstances, what is the meaning to be given to that word, is the primary question. In Manmadhan v. Krishnappan Unni ( 1985 KLT 670 ), a Division Bench of this Court, to which one of us was a party, was construing the word 'business' in the Government Servant's Conduct Rules. It was observed at page 672:-