PRAKASH CHAND SURANA Vs. COMMISSIONER OF WEALTH TAX

JUDGEMENT

(1.) THIS reference under Section 27(1) of the Wealth -tax Act, 1957, has been made by the Income -tax Appellate Tribunal, Jaipur Bench, Jaipur, in respect of the assessment year 1976 -77 referring the following question of law arising out of its appellate order dated August 29, 1984 :

(2.) THE facts of the case are that the family of the assessee consists of the karta, his son and wife. The Wealth -tax Officer treated the status as specified Hindu undivided family. On appeal before the Commissioner of Wealth -tax (Appeals), it was stated that the only member of the Hindu undivided family who had taxable wealth was the wife of the karta and no co -parcener is having any taxable wealth. In these circumstances, it was submitted that the status of the assessee could not be taken as that of a specified Hindu undivided family. The Commissioner of Wealth -tax (Appeals) allowed the appeal and sent the matter back to the Wealth -tax Officer to give reasons for adopting the status of specified Hindu undivided family. The matter was challenged before the Income -tax Appellate Tribunal by the Department. It was held that the assessee is a specified Hindu undivided family. The Tribunal has taken into consideration Schedule I, Part I(ii), wherein it is provided that in the case of every Hindu undivided family which has at least one member whose net wealth assessable for the assessment year exceeds Rs. 1,50,000 different rates of wealth -tax will apply. It was observed that the karta's wife is also a member of the Hindu undivided family though she cannot claim partition. The distinction between the word 'coparcener' and 'member' was also pointed out and it was said that in the Schedule the word 'member' has been written and not coparcener and, therefore, the wife being a member of the Hindu undivided family, the Wealth -tax Officer was justified in treating the Hindu undivided family as specified.

(3.) SCHEDULE I to the Wealth -tax Act provides the rates of tax and in Part I of the said Schedule, the rates of tax in respect of an individual or a Hindu undivided family have been prescribed. Item 2 of Part I prescribes the rate of tax in respect of a Hindu undivided family which has at least one member whose net wealth is assessable under the Wealth -tax Act.