COMMISSIONER OF WEALTH TAX Vs. TARACHAND AGARWALLA

JUDGEMENT

(1.) THESE are applications under S. 27(3) of the WT Act, 1957, "the Act" for short, asking for a reference of certain questions of law arising out of the order of the ITAT, Gauhati. We propose to dispose of the Civil rules by a common order. Civil Rule Nos. 85(M) to 89(M) of 1977

(2.) THE petitioner's case is that Respondents are partners of different firms. THE firms had agricultural land as one of the items of assets amongst various other assets held by it. In the WT assessment, the assessee-partners claimed that exemption under S. 5(1)(iva) of "the Act" should be allowed in respect of individual shares pertaining to the agricultural land held by the firm. THE WTO purporting to Act u/r 2 of the WT Rules, 1957 (as amended), for shout "the Rules," made the deduction of the exemption under S. 5(1)(iva) in computing the net wealth of the firm and allocated or distributed the balance amongst the partners for assessment. Appeals were taken by the assesses to the AAC of WT which were abortive. Further appeals were taken to the ITAT, Gauhati Bench, Gauhati. THE Tribunal inter alia held that the net wealth of the firm ought to be determined first deducting the exemption allowable and thereafter it should be apportioned or allocated amongst the partners according to the shares of the partners. It further held that the net wealth of the partners should be computed by including the shares so allocated under S. 2(m) of "the Act". After the said computation the necessary deduction allowable under S. 5(1)(iva) of "the Act" should be allowed in favour of each partner (assesses). THE Tribunal by its common order dt. 29th April, 1977 passed in W. T. A. Nos. 315 to 357 (Gau) of 1975-76 allowed the 7 appeals, set aside the order of the WTO and the AAC WT with necessary direction to the WTO to determine the net wealth of the firm and to allow the exemptions in respect of the assets under S. 5(1)(iva) pertaining the agricultural land. It also laid down the principles for determiniation of the shares of each partner, allocation of the shares and method to be adopted in computing the net wealth of the assessee-partners. THEre are directions by the Tribunal to the WTO to grant exemptions allowable under S. 5(1)(iva) of "the Act" to the partners.

(3.) AT this stage the learned Standing Counsel appearing on behalf of the Revenue prays that he may be allowed to submit one set of paper book. The prayer is allowed. in the result, the petitions are allowed and the rules issued are made absolute. Civil Rule Nos. 40(M) and 41(M) of 1979.