COMMISSIONER OF WEALTH-TAX vs HANS RAJ.

S. S. SODHI J. - The matter here pertains to the assessment year 1971-72 and 1972-73.

The assessee concerned is Hans Raj (Hindu undivided family). The karta of this Hindu undivided family was a partner, in his representative capacity, in a firm, Hari Chand Hans Raj, having 31 per cent. share therein. This firm owned some land. The difference between the appreciated value of this land, as assessed by the assessee and as assessed by Revenue, was Rs. 90,000 and thus out of this appreciated value, a sum of Rs. 27,900 came to be that attributable to the assessee.

When the matter came up before the Tribunal, it was contended that the assessee being a Hindu undivided family, it could not be a partner in the firm and, therefore, this amount of Rs. 27,900 could not be assessed in the hands of the assessee. This contention prevailed with the Tribunal, resulting in the following question being referred for our opinion, namely :

"Whether the tribunal was right in holding that, as the assessee could not be treated to be the partner of the firm within the meaning of section 4(1)(b) of the Wealth-tax Act, 1957, there was no legal obligation on it to follow the procedure laid down in rule 2B(2) of the Wealth-tax Rules, 1957, and, consequently, in deleting the penalty to the extent of Rs. 27,900 on that account, levied u/s 18(1)(c) of the Act, 1957 ?"

The first part of the question regarding the assessee being a Hindu undivided family and, therefore not being treated as a partner of the firm, within the meaning of section 4(1)(b) of the Wealth-tax Act, 1957, now stands concluded by the judgment of the Supreme Court in Juggi Lal Kamlapat Bankers and Another Vs. Wealth Tax Officer, Special Circle C-Ward, Kanpur and Others, , where it was held that there is no lacuna in the Wealth-tax Act, 1957, as regards the making of the interest of a karta, representing the Hindu undivided family in a firm, exigible to wealth-tax. A similar view has also been taken by other High Courts, namely, in Sudhakar Manibhai and Kulinsingh Manibhai Vs. Commissioner of Wealth-tax, , Juggilal Kamlapat Bankers and Another Vs. Wealth-tax Officer, C-Ward and Others, and S. Venka Reddy Vs. Commissioner of Wealth-tax, .

Turning to the next part of the reference regarding rule 2B(2) of the Wealth-tax Rules, 1957, it will be seen that, as the assessee had accepted that the difference was more than 20 per cent, this rule was clearly applicable, in view of the judgment of the Supreme court in Juggi Lal Kamlapat Bankers and Another Vs. Wealth Tax Officer, Special Circle C-Ward, Kanpur and Others, .

In dealing with this matter, it must, however, be clarified that the Tribunal gave no finding that concealment of the said amount of Rs. 27,900 was not proved on facts. In this view of the matter, while answering the reference in the negative. Against the assessee and in favour of the Revenue, we have no doubt that the Tribunal would now determine the fact of concealment of wealth by the assessee, if permissible in law. This reference is disposed of accordingly. There will be no order as to costs.