COMMISSIONER OF WEALTH TAX Vs. SANTOKH SINGH

JUDGEMENT

(1.) This order will also dispose of Wealth -tax Reference Nos. 10, 11, 14, 15, 16, 18 and 19 of 1977; 15, 16, 21 and 22 of 1978; and 1, 3, 4, 5, 6 and 7 of 1979. The assessees in all these references are different. The assessment years are 1973 -74, 1974 -75 and 1975 -76, the relevant valuation dates being 31 -03 -1973; 31 -03 -1974 and 31 -03 -1975. We only propose to deal with the facts in Wealth -tax Reference No. 17 of 1977. It is agreed by the learned counsels for the parties that the decision on question of law in this case will be applicable to all the references mentioned in this judgment. The relevant facts are in short compass. While making wealth -tax assessment for the assessment year 1974 -75, the WTO assessed the value of the agricultural land belonging to the assessee. As the agricultural land is situated within the urban area, the WTO treated that as an urban asset within the meaning of clause 2 of paragraph A, Part 1 of the Schedule to the Wealth -tax Act, 1957 (hereinafter called "the Act") and levied additional wealth -tax thereon.

(2.) The assessee who was dissatisfied with this decision went up in appeal to the AAC, Ludhiana. The AAC reversed the order of the WTO holding that the agricultural operation carried on by the assessee fell within the category of "business" and, therefore, it is covered by the exemption provided in Paragraph A(2) of Part 1 of the Schedule to the Act. The revenue then preferred an appeal to the Tribunal with the contention that the land belonging to the assessee is not covered by the exemption envisaged by paragraph A(2) of Part 1 of the Schedule and, therefore, the additional wealth -tax is leviable thereon. The contention of the assessee was that paragraph A(2), of Part 1 of the Schedule provides for levying additional tax on the urban assets but business premises have been exempted and as the asset, i.e., the agricultural land is covered by the expression "business premises", no additional tax is to be levied on the value of agricultural land within the meaning of paragraph A(2) of Part 1 of the Schedule. The Tribunal relied on the decision in C. Valu v/s. Executive Officer : AIR 1968 Ker. 41 and dismissed the revenue's appeal. However, on considering the whole matter, the Tribunal observed in its order as under:

(3.) The Commissioner being dissatisfied with the order of the Tribunal applied under Sec. 27(1) of the Act paying that the following question of law be referred for the opinion of this Court: