COMMISSIONER OF WEALTH TAX Vs. N T AGRAWAL

JUDGEMENT

(1.) THE Income Tax Appellate Tribunal, Jaipur Bench, Jaipur (for short 'the Tribunal' herein) has referred the following question for the opinion of this Court:- "whether on the facts and in the circumstances of the case the Income-tax Appellate Tribunal was right in holding that the assessee was entitled to exemption u/s 5 (1) (iv) of the Wealth-tax Act, 1957 in respect of the value of his 3/4th share in the house property thrown by him into the common hotch-potch of H. U. F. which was includible in his net wealth under section 4 (1a) of the Act ?"

(2.) THE assessee-respondent is an individual THE valuation date relevant to the assessment year 1975-76 was March 31, 1975. THE assessee filed Wealth Tax Return declaring the wealth of Rs. 1,96,400/ -. He claimed exemption for Rs. 1, 00, 000/- u/s 5 (1) (iv) of the Wealth Tax Act (Act No. XXVII of 1957) (which will for the sake of bravity hereinafter be referred to as 'the Act') in respect of the immovable property. THE Wealth Tax Officer, by his order dated February 20, 1976, was of the opinion that the ownership of property has been shifted from individual to H. U. F. as soon as the property is thrown in the common hotch-potch and that individual and the HUF are two different persons (entities) and, therefore, the ownership has changed hands. According to the Wealth Tax Officer, the property cannot be said to be owned by the assessee and therefore, the claim for exemption u/s 5 (1) (iv) of the Act was not allowed. He, therefore, determined the value of the immovable property u/s 4 (1a) of the Act.

(3.) S. 3. is the charging section which is as follows:- "3. Charge of wealth-tax.- Subject to the other provisions contained in this Act, there shall be charged for every financial year commencing on and from the 1st day of April, 1957, a tax (hereinafter referred to as wealth-tax) in respect of the net wealth on the corresponding valuation date of every individual, Hindu undivided family and company at the rate or rates specified in the Schedule. "