Law: Wealth Tax Act, (XV of 1963)

Section: SecondSched.,Cl.12(2)

Law: Wealth Tax Rules, 1963

Section: 8(3)

Wealth Tax Act (XV of 1963)----Second Sched., Cl. 12(2)---Exemption---Shop---Association of Persons--Exemption of shop was rejected by the Assessing Officer as the business was being conducted by the Association of Persons consisting of the assessee as member/partner and not solely by the assessee who was the sole owner of the shop---First Appellate Authority directed that the claim for exemption of shop under Cl.12(2) of the Wealth Tax Act, 1963 be accepted to the extent of 50% and the rest of 50% value be added in the taxable wealth---Validity---Order of the First Appellate Authority for allowing the exemption to the extent of 50% of the assessed value was upheld by the Appellate Tribunal as the said premises had been used by the appellant/assessee, also for the reason that it comfortably fell within the scope of Cl. 12(2) of the Wealth Tax Act, 1963 but as far as the method evolved for valuation of shop in the order was concerned it was not at all in conformity with the R.8(3) of the Wealth Tax Rule, 1963 so it was vacated and the Assessing Officer was directed to determine the Gross Annual Letting Value of the shop for its valuation: ORDER The assessee and the Department both have assailed the combined order pertaining to assessment years 1997-98 and 1998-99 passed by the learned CIT/WT(A) by filing cross-appeals in respect of common issues involved in both the years. Brief facts of the case are that the assessee claimed exemption for shop under clause 12(2) of the Second Schedule in the Wealth Tax Act, 1963 but the Assessing Officer reject it as the business was being conducted by an A.O.P. consisting of the assessee as member/partner and not solely by the assessee who is the sole owner of the impugned shop. In other words the exemption for shop could be enjoyed only when such owner is himself running the business. Then after rejecting the claim for exemption, the value of the shop was worked out by adopting the rate of land notified by D. C. for Stamp Duty and added to it the cost of construction determined by applying per sq. ft. rate. The entire total value so arrived at was added in the taxable wealth. The' learned CIT/WT(A) in appeal held that the…

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