WEALTH TAX OFFICER Vs. AISHA BEGAM
INCOME TAX APPELLATE TRIBUNAL
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U.T. Shah, Judicial Member -
(1.) THE short point, in these appeals preferred by the revenue is whether the assessee is entitled to exemption under Section 5(1)(xxxii) of the Wealth-tax Act, 1957 ('the Act'), in respect of the land/building owned by the firm in which she is a partner.
(2.) The assessee is a partner in the firm, Asia Tannery, Jajmau, Kanpur. The assessment years are 1973-74 to 1975-76 and the relevant valuation dates are 31st of March, 1973, 1974 and 1975 respectively.
In her wealth-tax return, the assessee claimed exemption of Rs. 1,50,000 each under Section 5(1)(xxxii), in respect of the value of her interest in the aforesaid firm. In the wealth-tax assessment for the assessment years, 1973-74 and 1974-75, the WTO gave exemption of Rs. 94,721 and Rs. 1,09,514 respectively, while in the assessment year 1975-76, he rejected such claim with the following remarks :
The assessee has claimed exemption of Rs. 1,50,000 under Section 5(1)(xxxii) in respect of her interest in M/s. Asia Tennery vide this office order-sheet entry dated 17-3-1980 the assessee was required to furnish by 25-3-1980 a copy of balance sheet along with computation of working under Section 5(1)(xxxii) so that her claim may be examined. Till to-day the required particulars have not been furnished. Limitation in this case expires after this month and as such the assessment cannot be pending. The claim of the assessee under Section 5(1)(xxxii) is, therefore, disallowed.
(3.) IN appeals, the assessee once again urged that she was entitled for exemption of Rs. 1,50,000 in each of the years under consideration, under Section 5(1)(xxxii) in respect of the value of her interest in the firm-Asia Tannery. IN his appellate order of the assessment year 1975-76, the AAC accepted the assessee's claim in the following manner:
Shri J.P. Gupta, CA, contended before me that the appellant's capital employed in the said firm amounted to Rs. 2,69,774 and the appellant was entitled to exemption under Section 5(1)(xxxii) to the extent of Rs. 1.5 lakhs and the WTO was not correct in rejecting the claim without giving any reasonable explanation, It was contended by Shri Gupta, CA, that the full claim amounting to Rs. 1.5 lakhs was admissible as per rules but the same has been denied by the WTO while calculating the capital employed in the industrial undertaking the WTO has excluded the value of land and building which is contrary to the provisions of the Wealth-tax Act. The assets including land and building which are otherwise exempt under Section 5 of the Wealth-tax Act are to be included. The factory land and building is not exempt under any other clause of Section 5, hence it should not have been excluded for the purpose of giving exemption for capital employed, while calculating the exemption under Section 5(1)(xxxii) of the Wealth-tax Act. Details of total assets including exempted assets have been filed as per chart filed by the counsel for the appellant. The appellant is entitled to exemption amounting to Rs. 1.5 lakhs. The WTO is directed to allow the claim under Section 5(1)(xxxii) of the Wealth-tax Act.
Following his aforesaid order, the AAC directed the WTO to allow exemption of Rs. 1,50,000 in each of the assessment years 1973-74 and 1974-75 vide his consolidated order dated 21-9-1981.;
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