COMMISSIONER OF WEALTH TAX Vs. KAETHIKAMAL KUMARI VARMA

JUDGEMENT

(1.) The Income Tax Appellate Tribunal, Cochin Bench has, under S.27(1)of the Wealth Tax Act, 1957, referred the following question of law for the opinion of the High Court:

(2.) The assessee is a partner of a firm called M/s. Koliat Estates. The assets of the firm include agricultural lands. In computing the net wealth of the assessee his interest in the firm was taken into account as required by S.4(1)(b) of the Wealth Tax Act. The assessee's claim for exemption under S.5(1)(iva) of the Act in respect of the value of her share of the agricultural assets of the firm was not accepted by the Wealth Tax Officer. In appeal the Appellate Assistant Commissioner allowed exemption under S.5(1)(iva) in computing the net wealth of the firm and directed a fresh assessment allocating the net wealth of the firm amongst the partners in accordance with the Wealth Tax Rules. In further appeal at the instance of the assessee, the Tribunal has allowed exemption under S.5(1)(iva) in computing the net wealth of the assessee. The above question of law referred to this Court under S.27(1)of the Act arises from the common order of the Tribunal passed in respect of the assessment years 1970-71 to 1973-74.

(3.) As per the charging provisions under S.3 of the Act, wealth tax is to be charged for every assessment year in respect of the net wealth of every individual, Hindu undivided family and company at the rates specified in the schedule. As per S.4(1)(b) the net wealth of an individual includes where the assessee is a partner in a firm or a member of an association of persons, the value of his interest in the firm or association determined in the prescribed manner. S.5 contains the exemptions and as per clause (iva) of sub-sec.(1)as it stood at the relevant period, agricultural land belonging to the assessee is exempt to the extent of its value upto Rs. 1,50,000/-. R.2 of the Wealth Tax Rules provides for the method of computation of the interest of a partner of a partnership firm or of a member in an association of persons.