COMMISSIONER OF WEALTH TAX Vs. JAWAHARBHAI D PATEL

JUDGEMENT

(1.) THE Income -tax Appellate Tribunal, Ahmedabad Bench 'B', has referred to the High Court the following three questions for opinion under section 27 of the Wealth -tax Act, 1957.

(2.) THE matter pertains to the assessment years 1970 -71 to 1974 -75. The assessee in his wealth -tax returns for the relevant years filed as an individual had shown that he had a 1/7th share along with his wife and five sons who were the co -sharers in the immovable property being lands situated in Harni, Sawad and Baroda Kasba. The assessee had got the land valued by his valuer. The Wealth -tax Officer while making the assessment for the said assessment years had referred the matter to the Departmental Valuation Officer (Lands and Buildings). The Wealth -tax Officer accepted the valuation made by the Departmental Valuation Officer and assessed the share of the assessee in the said property accordingly.

(3.) AGAINST the Commissioner's order, the assessee approached the Tribunal contending that the lands in question were agricultural lands and that this was borne out from the fact that they were treated as agricultural lands for the subsequent assessment years 1975 -76 to 1977 -78. The Tribunal held that the lands in question should be treated as agricultural lands in the years under appeal unless the claim of the assessee was rebutted by showing that the order of the Wealth -tax Officer for the subsequent years 1975 -76 to 1977 -78 was challenged and set aside by the higher authorities. The Tribunal held that since the order of the Wealth -tax Officer in respect of the subsequent years was not set aside, it was required to be held that the lands in question were agricultural lands. On the basis of this finding, the Tribunal held that the lands were entitled to exemption under section 5(1)(iva) of the Act as claimed by the assessee. Since, according to the Tribunal, the lands in question were agricultural lands and were thus, entitled to exemption, a direction was given to the Commissioner to ascertain the value of the land taking it to be agricultural land and decide the question afresh after hearing both the sides. Section 5 of the said Act provides for exemption in respect of certain assets. As per clause (iva) of section 5(1) as it operated at the relevant time, agricultural land belonging to the assessee subject to a maximum of Rs. 1,50,000 in value were to be exempted. The Tribunal has found that the said lands were agricultural lands and, therefore, the authorities had erred in denying exemption in respect thereof under section 5(1)(iva) as it operated at the relevant time.