COMMISSIONER OF WEALTH TAX Vs. TULSI DASS

JUDGEMENT

(1.) FOLLOWING questions of law have been referred to the High Court under Section 27(1) of the Wealth Tax Act, 1957 (for short, 'the Act of 1957') :-

(2.) FACTS, in brief, relevant for the purpose of answering the questions are that Shri Tulsi Dass (hereinafter shall be referred to as 'the assessee') is a partner in M/s. Gopal Talkies, Alwar, a partnership firm. The assess submitted return of his properties before the Wealth Tax Officer and shown the credit balance in M/s. Gopal Talkies, Alwar amounting to Rs. 1,03,210/- (Rs. one lac three thousand two hundred and ten only). The partnership firm M/s. Gopal Talkies in its books of accounts had shown the value of Gopal Talkies at Rs. 7,25,000/- (Rs. seven lac twenty- five thousand) inclusive of the cost of the building. During the assessment proceedings of the assessee Tulsi Dass, the Wealth Tax Officer came to the prima facie conclusion that the valuation of Gopal Talkies at Rs. 7,25,000/- reflects under-valuation of the property. The assessing officer made a reference to the valuation officer by letter dated 6.1.1978 to make fresh valuation of Gopal Talkies. After re-valuation, the valuation officer has assessed the value of Gopal Talkies at Rs. 14,73,000/- and accordingly the assessee Tulsi Dass was assessed for wealth tax taking the valuation given by the valuation officer of Gopal Talkies. Aggrieved by the said order, the assessee preferred an appeal before the Assistant Appellate Commissioner of Income Tax. The submission made by the assessee that the valuation report was made by the valuation officer without giving notice to him, has found favour with appellate authority and accordingly the valuation report was struck down. The appellate authority has also given to the assessee the benefit of Section 5 (1)(iv) of the Act of 1957 to the extent of Rs. 1,00,000/- and accordingly assessed the assessee for the wealth tax purposes.

(3.) AS regards another question which has been referred to us whether the assessee is entitled for exemption under Section 5(1)(iv) of the Act of 1957. Relevant provision reads as under :- Wealth tax shall not be payable by an assessee in respect of following assets (and such assets shall not be included in the net wealth of the assessee)-