Law:

Section:

Section 4, read with section 5(1)(xxviii), of the Wealth-tax Act, 1957 - Deemed wealth - Assessment year 1979-80 - Whether expression 'building or a part thereof' in section 4(7) would also include open plot of land - Held, no - Whether, therefore, a member's interest in an open plot of land belonging to a co-operative housing society and allotted or let out to member, is exempt from liability to wealth-tax - Held, yes FACTS The assessee, along with his three brothers, owned three plots of land in two co-operative housing societies. The Assessing Officer included 1/4th value of the plots, as determined by the approved valuer of the assessee, in the net wealth of the assessee. That was confirmed by the first appellate authority. The assessee contended that in view of the provisions of section 4(1)(b), read with section 4(7), open plots of land belonging to co-operative housing society and allotted to members were not includible in the net wealth. The Tribunal rejected the appeal and also miscellaneous application filed by the assessee. On reference : HELD An analysis of the provisions of sections 3, 2(m), 4(1), 4(7), 5(1)(xxviii ) and 45(g) would reveal that the properties belonging to a co-operative housing society are completely exempt from the liability to wealth-tax. So also the shares held by an individual in a co-operative housing society are also exempt from the liability to wealth-tax under section 5(1)(xxviii ). In view of section 5(1)(xxviii), it is obvious that the shares in a co-operative housing society and all the rights flowing therefrom have been completely exempted from the liability to wealth-tax. However, while granting such exemptions with effect from 1-4-1972, under the aforesaid clauses, the Legislature inserted the certain words in section 4(1)(b) so as to ensure that each and every interest of the member in a co-operative housing society is not to be included in the net wealth. Which property of the assessee is to be included in the net wealth for the purposes of exigibility to wealth-tax with effect from 1-4-1972, is specifically provided for in sub-section (7) of section 4. The said provision only covers a building or a part thereof…

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