Law:

Section:

Section 2(e) (As it stood prior to amendment in 1969) of the Wealth-tax Act, 1957 - Assets - Whether capitalized value of sayar income, derived from agricultural land, was exempt under section 2(e)(i) and, thus, could not be included in net wealth of assessee - Held, yes FACTS The Tribunal found as a fact that the sayar income of the assessee was derived under four specific heads: (a) Receipts from haq malkana, (b) Receipts from use of bazar land, (c) Receipts from melas and fairs held on the assessee's land, and (d) Receipts from sale of old trees. All those receipts were income from agricultural land. The Tribunal held that the capitalised value of sayar income could not be included in the net wealth of the assessee and was exempt under section 2(e)( v) On reference : HELD Agricultural land was expressly been excluded from the concept of asset as known to the Act. It is the value of the assets belonging to a person that are included in the net wealth of a person. In the instant case, it had been found as a fact that the entire income in question which was sought to be added to the net wealth of the assessee, in the form of capitalization of the average annual sayar income by multiplying it by 20, was, in fact, income derived from agricultural land. Since agricultural land is not an asset within the meaning of the Act, income derived from such asset could not be capitalized so as to form an asset of a different character. It was not possible to say that in future sayar income would necessarily accrue to the assessee. Moreover, even so, it would not become an "interest in property" other than agricultural land. Even if this income accrued to the assessee for more than six years, it would be an income from agricultural land. The source of the income would not change to property other than agricultural land. Therefore, section 2(e)( v) refers to interest in non-agricultural land and an interest in agricultural land is exempt under section 2(e )(i). Also the capitalized value of sayar income could not be included in the net wealth of assessee as it was exempt under section 2(e)( i). Note: The case was decided in favour of the assessee. JUDGMENT Satish Chandra,…

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