COMMISSIONER OF INCOME 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 is an assessee to wealth -tax. She is an individual. She owns 32 acres of land. Out of the above 32 acres, 26 acres are 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 above the assessee. We are concerned with the asst. yrs. 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 WTO levied additional wealth -tax on these lands. The respondent -assessee 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 Tribunal. The Tribunal relied on the decision of the Punjab and Haryana High Court in CWT v. Hari Singh, (1980) 15 CTR (P&H) 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 the questions of law have been referred for the decision of this Court.

(3.) WE heard the counsel for the revenue, Mr. Menon. The respondent was not represented before us. As per s. 3 read with the Schedule, Part I, Paragraph A, rule No. (2), read with Paragraph B, rule No. 1(i) of Part I, 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 Paragraph B, r. (1) of Part I and r. (2) of Para A, Part I of the First Schedule to the WT Act ? The Supreme Court in Konduri Buchirjalingam v. State of Hyderabad : AIR 1958 SC 756 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 the Sales Tax Act, 1958. Earlier, the Bombay High Court in Girdharilal Jiwanalal v. ACST : (1957) 59 BOMLR 710 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 dealer for the purpose of the Sales Tax Act. The word business has not been defined in the Wealth -tax Act, 1957 (hereinafter referred to as the 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 Servants Conduct Rules. It was observed :