Law:

Section:

Section 5(1)(iva) of the Wealth-tax Act, 1957 [omitted with effect from 1-4-1983] - Exemption - Agricultural land - Assessee was partner of a firm and had certain share therein - That firm owned agricultural land - Whether assessee was entitled to exemption under section 5(1)(iva) in his personal assessment in respect of his share of agricultural land belonging to firm - Held, yes - Whether when firm was not an assessee under Act and properties of firm were treated as assets in hands of its partners to extent of their respective shares, question of any exemption under section 5(1)(iva) being allowed to firm would not arise - Held, yes Facts The assessee was a partner of a firm. The firm owned agricultural land and the assessee had a certain share in the aforesaid firm. For the assessment years 1972-73 to 1974-75, the assessee claimed exemption under section 5(1)(iva) in respect of his share in the agricultural land of the firm. The WTO disallowed the assessee's claim. On appeal, the Tribunal held that the assessee was not entitled to exemption under section 5(1)( iva) in his personal assessment of wealth in respect of his share in the agricultural land belonging to the firm. The Tribunal, however, held that exemption would be taken into account while determining the net wealth of the firm. On reference: Held The status of a partnership under the Income-tax Act is different from that under the Wealth-tax Act. The Income-tax Act contains special provisions under which a partnership firm is an assessable entity and further provisions have been made in the Act for assessment of a partnership firm to income-tax. So far as the Wealth-tax Act is concerned, a partnership firm is not an assessable entity. Therefore, the concepts of partnership in the context of the Income-tax Act cannot be imported into the Wealth-tax Act. The Act is a separate Act and contains its own scheme for assessment of wealth-tax. A partnership hating been excluded from assessment under the Act and provisions having been made for assessment of the properties standing in the name of the firm in the hands of the partners according to their respective shares, the general concepts of the nature of a…

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