Decided on October 21,1983



- (1.) Accountant Member - The assessee, Indian Jute Mils Association, having its registered office at 6, Netaji Subhas Road, Calcutta, has been stated to be an association established to protect, forward and defend the trade of the members of the association. The said association has been registered under the Indian Trade Unions Act - XVI, 1926.
(2.) The WTO initiated wealth-tax proceedings by the issue of notices under section 17 of the Wealth-tax Act, 1957 (the Act) for the assessment year 1968-69, 1970-71 and 1971-72 and in response thereto, the assessee being an AOP was not an entity which could be charged to tax in terms of section 3 of the Act. In was claimed that the assets of the association being held under a legal obligation for public charities as enumerated in the rules and regulations of the association, the same could not be brought to tax in view of section 5(1) (i) of the Act. The WTO negatived both the contentions of the assessee by observing that the world individual includes a group of persons forming a unit or an AOP and for this proposition, reliance was placed on the two Supreme Court decisions in the cases of CIT v. Sodra Devi, 1957 32 ITR 615 and Banarsi Dass v. WTO, 1965 56 ITR 224 . The WTO further held that the assessee was not entitled to the immunity available under section 5(1) (i) inasmuch as the assessee had been carrying on activities of profit and also on the ground that as per rule 2 of Chapter XIV, the surplus funds of the association representing accumulated subscription and interest were liable to be distributed amongst the members of the association in the event of the dissolution of the association. The wealth-tax assessments were, accordingly, completed in the status of an AOP on net wealth of Rs. 11,63,661 for the assessment year 1968-69 and on net wealth of Rs. 13,01,944 and Rs. 14,44,855, respectively, for the assessment years 1970-71 and 1971-72. The AAC upheld the assessments vide his consolidate order dated 5-12-1981.
(3.) The present appeals filed by the assessee are against the said order of the AAC, in which the common contentions raised are as follows : (i) that the AAC erred in holding that the assessee was was chargeable to wealth-tax thereby, ignoring the provisions of section 3; (ii) that the AAC failed to notice that the assets of the assessee were exempt from wealth-tax under section 5(1) (i); and (iii) that the AAC erred in not directing the WTO to allow deduction in respect of liabilities claimed before the WTO.;

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