COMMISSIONER OF WEALTH TAX Vs. BUTCHI KRISHNA I

JUDGEMENT

(1.) THE Wealth-tax Appellate Tribunal, Cuttack Bench, has stated this case and referred the following question for the opinion of the court under Section 27(1) of the Wealth-tax Act of 1957 (hereinafter referred to as "the Act"):

(2.) ASSESSEE is a partner in three firms, two of which are Immidisetti Ramakrishniah Sons, Anakapalle, and Immidisetti Ramakrishniah Sons, Berhampur. The relevant assessment year is 1972-73 and the valuation date is March 31, 1972. In computing the net wealth, the assessee worked out bis 11 per cent. share in the exempted assets such as bank deposits, Government securities, T.D.S. Bonds et cetra held by the firm, M/s. I.R.K. Sons, Anakapalle, at Rs. 91,400 and he deducted the same from the sum of Rs. 2,54,581 which represented his share of the capital in the firm. The WTO did not accept the computation and was of the view that, in terms of Rule 2 of the W.T. Rules, the exemption of Rs. 1,50,000 as provided in Section 5(1A) of the Act should be adopted in the hands of the firm and the net wealth of the firm should thereafter be calculated. According to the method indicated by the WTO, the assessee was entitled to an exemption within the upper limit of Rs. 16,500 as against Rs. 91,400 claimed by him. The Assessing Officer was further of the view that Rule 2D(c) of the Rules had no application in the case of a partner while valuing his interest in the firm. He, accordingly, computed the net wealth at Rs. 3,81,190.

(3.) ASSESSEE would have his costs of the reference. Hearing fee is assessed at rupees one hundred.