Commissioner of Wealth Tax vs M.V. Annaporni Achi

Thanikkachalam, J.—At the instance of the Revenue under s. 27(1) of the WT Act, 1957, the Tribunal referred the following common

question relating to the asst. yrs. 1973-74 to 1977-78 for our opinion :

Whether, on the facts and in the circumstances of the case, the Tribunal is right in law in holding that the assessee is entitled to the deduction of Rs.

1,50,000 under s. 5(1)(iva) of the WT Act, 1957 ?

M. V. Annapoorani Achi (applicant) is the wife of A. L. N. Muthu Veerappa Chettiar, who expired some years ago. The said Muthu Veerappa

Chettiar had two sons. The sons and their mother, the assessee, have inherited a one-third share each in the estate of Muthu Veerappa Chettiar.

The estate comprised house properties and agricultural lands. The value of the agricultural lands as per the balance-sheet is Rs. 1,50,952. For the

asst. yrs. 1973-74 to 1977-78, it was claimed that the assessee is entitled to the exemption of agricultural lands to the maximum extent under s.

5(1)(iva) of the WT Act. The WTO refused to grant this exemption. According to the WTO, the assessee is entitled to exemption to an extent

proportionate to the share held by her. He is also of the opinion that exemption is available to the maximum amount only in the case of all the co-

owners. On appeal, the AAC following the decisions of the Karnataka High Court in the cases of Commissioner of Wealth Tax, Karnataka-I,

Bangalore Vs. Purushotham, Pai, and Commissioner of Wealth-Tax, Karnataka-I Vs. Christine Cardoza, held that the exemption under s. 5(1)

(iva) of the Act should be given in its entirety to the assessee. Accordingly, the AAC allowed the claim made by the assessee to the extent of Rs.

1,50,000 under s. 5(1)(iva) of the Act. On appeal, the Tribunal agreed with the AAC and held that the assessee is entitled to full exemption as

contemplated under s. 5(1)(iva) of the Act.

Learned standing counsel for the Department contended that the assessee is entitled to exemption proportionately out of Rs. 1,50,000 in

accordance with the share held by her. Accordingly, he supported the view taken by the Department. On the other hand, learned counsel for the

assessee supported the view taken by the Tribunal.

The question that arises for consideration is, whether the assessee is entitled to exemption under s. 5(1)(iva) of the Act in its entirety or to a

portion of Rs. 1,50,000 in accordance with the share held by her. Sec. 5(1)(iva) of the Act did not say anything about the extent of agricultural

land to be held by the assessee. The said section gives exemption of Rs. 1,50,000 if the assessee has possessed agricultural lands. Therefore, the

question of allowing proportionate amount out of Rs. 1,50,000 did not arise. In the decisions in Purushotham Pai''s case (supra), Christine

Cardoza''s case (supra) and also the decision in Commissioner of Wealth-tax Vs. Smt. Vimlabai Kantilal Porwal, , it has been held that the

assessee is entitled to exemption under s. 5(1)(iva) of the Act in its entirety if the assessee is the owner of agricultural lands. No contrary decision

was brought to our notice as against the view taken by the Karnataka High Court and the Madhya Pradesh High Court in the decisions cited

supra. Considering the facts of this case in the light of the judicial pronouncements in the decisions cited supra, we are of the opinion that the

Tribunal was correct in granting full exemption to the extent of Rs. 1,50,000 to the assessee under s. 5(1)(iva) of the Act. In this view of the

matter, we answer the question referred to us in all these references in the affirmative and against the Department. No costs. Counsel''s fee is fixed

at Rs. 1,000 (rupees one thousand).