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Judgment
The Income Tax Appellate Tribunal, Allahabad has referred the following question of law u/s 27(1) of the Wealth Tax Act- Whether on the facts and in the circumstances of the case, the Tribunal is correct in holding the value of agricultural land is not includible when the agricultural land is clearly include in the definition of assets?
The dispute relates to the Assessment Year 1972-73, the Wealth Tax Officer did not accept the claim of the assessee and refused to treat the disputed land as agricultural land. This finding was reversed by the Commissioner of Wealth Tax (Appeals). The Commissioner of Wealth Tax (Appeals) took the view that the agricultural land is exempted u/s 5(1)(i)(Vi-a). The Department preferred his Second Appeal before the Tribunal. The Tribunal confirmed the order of First Appellate Authority.
Heard Sri R.K. Upadhyay, Advocate for the Department and Sri R.S. Agrawal, Advocate for the assessee.
Section 5 of the Wealth-tax Act provides exemption in respect of certain assets.
The contention of the Department is that agricultural land is included within the definition of assets as defined in Wealth Tax Act, therefore, the agricultural land is liable to be included in the net wealth of the assessee.
We have given careful consideration to the aforesaid submission of the learned counsel for the parties.
Relevant provisions of Section 5 of Wealth-tax Act reads as follows-
Exemption in respect of certain assets,-(1) Subject to the provisions of sub-section (1A) wealth-tax shall not be payable by an assessee in respect of the following assets, and such assets shall not be included in the net wealth of the assessee-
(i) .........
(ii) ..........
(iii) ..........
(iv) ............
(iv-a) agricultural land belonging to the assessee subject wise a maximum of one hundred and fifty thousand rupees in value :
(iv-b) ....
It was pointed out that with effect from 1-4-1975 the expression, "subject...............value" from main clause, as well as its proviso, was deleted by the Finance Act, 1974.
Copy of the relevant assessment order i.e. for the year 72-73 has not been enclosed.
On a bare perusal of the aforesaid Section it is clear beyond doubt that agricultural land is exempted. It is not in dispute that the property in question is agricultural land. On the plain language of the aforesaid Section there is no manner of doubt to hold that agricultural land belonging to assessee is exempted from the net asset value of the assessee under Wealth Tax Act.
Copy of the assessment order for the next assessment, which is wholly irrelevant has been endorsed, which does not throw any light to the controversy involved. In view of the above, the answer the question in affirmative i.e. in favour of the assessee and against Department.