Commissioner of Wealth-tax vs Smt. Taramani Devi Jalan

D.N. Baruah, J.—The following question, has been referred u/s 27(1) of the Wealth-tax Act, 1957 (hereinafter to be referred to as "the Act"), for the opinion of this court :

"Whether, on the facts and in the circumstances of the case, the Tribunal was justified in modifying the Appellate Assistant Commissioner''s order directing the Wealth-tax Officer to follow certain decisions of the Special Bench of the Tribunal and the Division Bench of the High Court in effect goes against the ground taken by the appellant though the respondent has not raised any ground before the Tribunal either by tiling cross-object-ions or by an appeal ?"

An assessment was made against the assessee for the assessment year 1981-82 as an individual. The assessment was made u/s 16(3) of the Act. In addition to other properties, the assessee had interest in the firm which owned landed property also. The assessee claimed exemption u/s 5(1)(iv) in respect of such landed properties. The Wealth-tax Officer mentioned that as the building in respect of which the claim was made u/s 5(1)(iv) belonged to the firm, the exemption claimed was not allowed. The matter was taken to the Appellate Assistant Commissioner who noted that the value of the assessee''s interest in each of the two firms has to be determined in accordance with Rule 2 of the Wealth-tax Rules, 1957. He, therefore, set aside the order of the Wealth-tax Officer and directed fresh assessment by the Wealth-tax Officer in accordance with law. Thereafter, the Revenue took up the matter before the Appellate Tribunal, who, after hearing the parties, upheld the order of the Appellate Assistant Commissioner and directed the Wealth-tax Officer to dispose of the matter afresh in the light of the decisions reported in Ratansi Narayan Patel Vs. Commissioner of Income Tax, and also in Addanki Narayanappa and Another Vs. Bhaskara Krishtappa and Others, and after giving the assessee an opportunity of being heard.

We have heard Mr. D.K. Talukdar, learned standing counsel appearing on behalf of the Department, and Mr. G.K. Joshi, learned counsel appearing on behalf of the assessee. Going through the facts and circumstances of the case, we find that the Tribunal was justified in remanding the matter to the Wealth-tax Officer in view of the above decisions.

We answer the question referred to us in the affirmative, that is, against the Department and in favour of the assessee.

A copy of the judgment under the signature of the Registrar and the seal of the High Court be transmitted to the Appellate Tribunal. There will be no direction as to costs.