PRAKASH CHAND MODI VS COMMISSIONER OF WEALTH TAX
1998 P T D 2288
[225 I T R 541]
[Rajasthan High Court (India)]
Before B.R. Arora and B.J. Shethana, JJ
PRAKASH CHAND MODI
versus
COMMISSIONER OF WEALTH TAX
D.B. W.T. Reference No.4 of 1990, decided on 28/11/1995.
Wealth tax---
----Exemption---Factory land and building owned by a firm---Partner is not entitled to exemption under S. 5(1)(iv)---Indian Wealth Tax Act, 1957, S.5(1)(iv).
Held, that the assessee, partner of a firm, is not entitled to exemption under section 5(1)(iv) of the Wealth Tax Act, 1957, in respect of factory land and building owned by the partnership-firm.
Ganga Devi (Smt.) v. CWT (1987) 166 ITR 325 (Rai.) fol.
C.I.T. v. Chidambaram Pillai (R.M.) (1977) 106 ITR 292 (SC); C.W.T. v. Surajratan R. Mohatta (HUF) (1996) 217 ITR 537.(Bom.); Ravi Mohan v. C.W.T. (1989) 180 ITR 667 (MP) and Venkatavaradha Reddiar (R.) v. C.W.T. (1995) 214 ITR 76 (Mad.) ref.
Vineet Kothari for the Assessee.
Sandeep Bhandawat for the Commissioner.
JUDGMENT
B.R. ARORA, J.---The Income-tax Appellate Tribunal, Jaipur Bench, Jaipur, for the assessment year 1977-78 under section 27(1) of the Wealth Tax Act, 1957, referred the following question of law for the opinion of the High Court:
"Whether under the facts and circumstances of the assessee's case and whether under a true and correct interpretation of section 5(1)(iv) of the Wealth Tax Act, the assessee is entitled to grant of exemption under section 5(1)(iv) of the Wealth Tax Act in respect of factory land and building owned by the partnership firm styled as Hindustan Radiators, which, in fact, collectively belongs to the partners? "
It is contended by learned counsel for the assessee that the question framed by the Tribunal does not arise in the present case because the Wealth Tax Officer, Central Circle, Jodhpur, disallowed the claim of the assessee for the exemption under section 5(1)(iv) of the Act as the factory building is not covered under this definition and the question referred by the Tribunal, therefore, requires to be refrained; or in the alternative, the Tribunal may be directed to send a fresh statement of the case as in the present form, the question is purely academic in nature and should be returned unanswered. It is further contended by learned counsel for the assessee that though there is a judgment of this Court on the point in issue which covers the question referred by the Tribunal but the judgment of this Court rendered in Sint. Ganga Devi v. CWT (1987) 166 ITR 325 requires reconsideration in view of the later judgments rendered in Ravi Mohan v. CWT (1989) 180 ITR 667 (MP); CWT v. Surajratan R. Mohatta (HUF) (1996) 217 ITR 537 (Bom.) and R. Venkatavaradha Reddiar v. CWT (1995) 214 ITR 76 (Mad.). Learned counsel for the Revenue, on the other hand, has supported the order passed by the Tribunal and submitted that the only question, which has been referred for the opinion of this Court, arises out of the judgment passed by the Tribunal and no other question arises and that question was referred on the application made by the assessee and the question, as it stands, can be decided and there is no question of refraining the question by this Court. It is also contended by learned counsel for the Revenue that the, Division Bench judgment of this Court does not require any reconsideration as the same has been passed relying upon the judgment of the Supreme Court in CIT v. R.M. Chidambaram Pillai (1977) 106 ITR 292.
We have considered the submissions made by learned counsel for the parties.
The first contention raised by learned counsel for the assessee is that the question referred by the Tribunal does not arise in the present case. Section 256 of the Income Tax Act requires the Appellate Tribunal to refer to the High Court any question of law arising out of the order passed by the Tribunal. The question referred by the Tribunal does arise out of the order passed by the Tribunal because that was the only ground raised by the Revenue. The assessee in its application moved under section 256(1) also requested for referring the abovenoted question for the opinion of the High Court. It is only on the application of the assessee, in which a prayer was made for referring the above question for the opinion of the High Court, the question sought by the assessee has-been referred. The contention, raised by learned counsel for the assessee, is, therefore, devoid of any force as the question which was sought to be referred by the assessee, was referred for the opinion of this Court.
The next question raised by learned counsel for the assessee is that the Division Bench judgment of this Court requires reconsideration in view of the later judgments of the Madhya Pradesh, Bombay and Madras High Courts referred to above. After going through the judgment of the Division Bench of this Court in Smt. Gang) Devi's case (1987) 166 ITR 325, we agree with the view taken by the Division Bench in Ganga Devi's case (1987) 166 ITR 325 (Raj.) and we are further of the opinion that the judgment passed by the Division Bench in Ganga Devi's case (1987) 166 ITR 325 (Raj.) does not require reconsideration. There is no judgment either of the Supreme Court or of the High Court taking a contrary view which could not be considered by the Division Bench at the time of deciding Ganga Devi's case (1987) 166 ITR 325(Raj.). Even after the decision in Ganga/davi's case (1987) 166 ITR 325 (Raj.), there is no judgment of the Supreme Court or of this Court taking a contrary view. In this view of the matter, we are of the opinion that the judgment of the Division Bench in Ganga Devi's case (1987) 166 ITR 325 (Raj.) does not require any reconsideration and we agree with the view taken by the Division Bench in Ganga Devi's case (1987) 166 ITR 325 (Raj.).
The material facts of this case are similar to the fact in Ganga Devi's case (1987) 166 ITR 325 (Raj.) and an identical question of law was referred in that case and the Tribunal, while answering the question in the negative, i.e., against the assessee and in favour of the Revenue, held that "the partners , of Messrs. Bichandi Agricultural Farm cannot claim exemption under section 5(1)(iv-a) in respect of the agricultural land of the firm, for, those lands do not belong to them and the benefit under section 5(1)(iv-a) of the Act can be given to the firm and not to an individual partner." For the same reasons given in Ganga Devi's case (1987) 166 ITR 325 (Raj.), the present reference is answered in the negative, i.e., in favour of the Revenue and against the assessee, and it is held that the assessee is not entitled for the grant of exemption under section 5(1)(iv) of the Wealth Tax Act in respect of the factory land or the building owned by the partnership firm styled as Hindustan Radiators, which, in fact, collectively belongs to the partners.
Consequently, the reference is answered in the negative, i.e., in favour of the Revenue and against the assessee, and it is held that the assessee is not entitled to grant of exemption under section 5(1)(iv) of the Wealth Tax Act in respect of factory land and building owned by the partnership firm styled as Hindustan Radiators, which in fact collectively belongs to partners.
M.B.A./1481/FCReference answered.