| Citation(s) |
|---|
| 1980 SLG 505 1980 SLD 505 1980 PTD 77 (1980) 41 TAX 78 |
Gujarat High Court
Wealth Tax References Nos. 8 and 9 of 1974, decision dated: 7th April 1977
S. OBUL REDDI, C.J. AND M. P. THAKKAR, J
K. C. Patel for the Assessee. G. N. Desai with R. P. Bhatt for R. P. Bhatt & Co. for the Commissioner.
Wealth Tax References Nos. 8 and 9 of 1974, decision dated: 7th April 1977
S. OBUL REDDI, C.J. AND M. P. THAKKAR, J
K. C. Patel for the Assessee. G. N. Desai with R. P. Bhatt for R. P. Bhatt & Co. for the Commissioner.
SUDHAKAR MANIBHAI and KULINSINGH MANIBHAI
COMMISSIONER OF WEALTH TAX
Law: Wealth Tax Act, (XV of 1963)
Section: 4(1)
Wealth tax- -- Karta of Hindu undivided family partner in a firm-An "assessee" within meaning of S. 4 (1) (b) of Indian Wealth Tax Act, 1957-Interest of such partner in partnership business-An asset for purposes of Act-Can be included in net wealth of Hindu undivided family. Section 4 (1) (b) of the Indian Wealth Tax Act, 1957, has to be interpreted by taking into account the definition of the expression "assessee" contained in section 2 (c) of the Act which provides that "assess:" means a person by whom wealth tax or any other sum of money is payable under this Act. There is nothing in section 4 (1) (b) which would suggest that the expression "assessee" is employed therein in a different or restricted sense so as to apply to assessees who are individuals only. The karta of a Hindu undivided family who is a partner in a firm would fall within the expression "assessee" in section 4 (1) (b). The Supreme Court of India has stated in Narayanappa v. Bhaskara Krishnappa A I R 1966 S C 1300, that the properties of a firm belong to all the partners and no individual item of the properties belongs to any individual partner. The Supreme Court has not thereby laid down that a partner has no interest in the assets of the partnership or has no interest in the partnership which is capable of being valued. A partner has an interest in the firm which is capable of being valued. Where a karta of a Hindu undivided family is a partner in a firm, his interest in the partnership is an "asset" for the purposes of the Act includible in the net wealth of the Hindu undivided family under the provisions of section 3. There is adequate machinery under the provisions of tire Wealth Tax Act and the Rules made thereunder to evaluate and compute such interest. Such evaluation and computation is to be made under the provision of rule 2 read with section 7 of the Act. Banarsi Dass v. W. T. O. (1965) 56 I T R 224 (S C) applied. Narayanappa v. Bhaskara Krishnappa A I R 1966 S C 1300 explained. JUDGMENT THAKKAR, J. -This common judgment will dispose of two allied references made at the instance of two brothers representing their respective Hindu undivided family (H. U. F.) which raise…
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