Law:

Section:

JUDGMENT Srinivasa Iyengar, J.-The Income-tax Appellate Tribunal, Bangalore Bench, has referred a question of law which is common to both the cases. The question relates to the admissibility of a deduction as provided in section 5(1)(iv-a) of the Wealth-tax Act, 1957, as it stood in the relevant assessment years 1970-71 and 1971-72 (hereinafter referred to as "the Act"). The question referred to is as follows: "Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the assessee is entitled to a deduction of one lakh fifty thousand rupees under section 5(1)(iv-a) of the Act ?" The material facts lie in a narrow compass. The assessee and four others owned an estate known as the Shigade plantations in partnership. The estate was valued by an approved valuer whose valuation was accepted by the Wealth-tax Officer. In determining the net wealth of the assessee for the assessment year 1970-71, what the Wealth-tax Officer did was to compute the net wealth of the firm including the value of the agricultural lands therefor and thereafter giving a deduction under section 5(1)(iv-a) of the Act to the extent of the share held by the assessee in the firm, i.e., he deducted a sum of Rs. 18,750 in this behalf as the assessee had a 2/16th share in the firm. But in the assessment for the year 1971-72, what the Wealth-tax Officer did was to give a deduction of one lakh fifty thousand rupees, after ascertaining the wealth of the firm including the value of the agricultural lands therefor and thereafter apportioned the share of each of the partners in respect of their interest in the firm. The claim of the assessee was that she should be given a deduction in a sum of Rs. 1,50,000 under section 5(1)(iv-a), which was not accepted by the Wealth-tax Officer. The appeals preferred by the assessee to the Appellate Assistant Commissioner of Wealth-tax in this behalf did not meet with success. On further appeals by the assessee to the Income-tax Appellate Tribunal the contention was accepted and the Tribunal held that the assessee was entitled to a deduction of Rs. 1,50,000 under section 5(1)(iv-a). At the instance of the department the…

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