COMMISSIONER OF WEALTH TAX Vs. K VIVEKANANTHAN

JUDGEMENT

(1.) A common question of law has been referred by the Tribunal, for our opinion, under section 27(1) of the Wealth-tax Act, 1957 (hereinafter referred to as "the Act"), for the assessment years 1973-74 to 1976-77, which runs as under "Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the agricultural lands at Kurichi should be treated as 'business premises' within the meaning of rule 1(i), Para. B, Part I of the Schedule to the Wealth-tax Act, 1957, and, consequently, no additional wealth-tax should be levied for the assessment years 1973-74 to 1976-77?" * The assessee is an individual.

(2.) THE Wealth-tax Officer, after making the assessment, passed a rectification order under section 35 of the Act for the assessment years 1973-74 to 1976-77 to levy additional wealth-tax on the agricultural lands on the ground that they are urban immovable properties and subject to additional wealth-tax under rule 1(i), Para-B, Part I of the Schedule to the Wealth-tax Act.

(3.) THERE are different kinds of agricultural lands, and to classify the agricultural land as business premises, there must be some materials. It is possible to visualise several illustrations. Take for an example, a large extent of agricultural lands, and where the assessee carries on systematic activity of agricultural operations. Likewise, there may be a small extent of land in factory premises needed for the assessee's business purposes. Yet, another instance can be where there is an agricultural land, in which agricultural operations are carried on as a normal agriculturist, and the surplus of the agricultural produce is sold. In all three instances stated above, the fact that agricultural operations were carried on would show that there was an employment of capital and labour. In first two instances, there can be no difficulty in holding that the agricultural lands were owned and used for the business, but in the third instance, unlessthe assessee establishes that the land was used as business asset, the agricultural land, per se, cannot be treated as business premises.