1995 (9) TMI 13 - HC - Wealth-tax

Summary

Issues Involved:
1. Entitlement to deduction u/s 5(1)(iv)(a) for agricultural land held by a firm in which the assessee is a partner.
2. Classification of coffee and tea bushes as "growing crops" u/s 5(1)(viiia).

Summary:

Issue 1: Entitlement to Deduction u/s 5(1)(iv)(a)
The court addressed whether an assessee-individual is entitled to a deduction u/s 5(1)(iv)(a) for agricultural land held by a firm in which the assessee is a partner. The Appellate Tribunal had ruled in favor of the assessee, stating that the partner's share in the firm's exempted assets should be considered for deduction while computing the net wealth of the assessee-individual. The court upheld this view, referencing the decision in R. Venkatavaradha Reddiar v. CWT [1995] 214 ITR 76, which supported the Tribunal's conclusion. Thus, the court answered the first question in the affirmative, favoring the assessee.

Issue 2: Classification of Coffee and Tea Bushes as "Growing Crops" u/s 5(1)(viiia)
The second issue involved determining whether coffee and tea bushes fall within the expression "growing crops" u/s 5(1)(viiia) of the Wealth-tax Act. The Tribunal had concluded that "growing crops" referred only to the yield (e.g., two leaves and a bud in tea, berries in coffee) and not the entire plant. The court examined various legal precedents and the legislative intent behind the provision. It concluded that "growing crops" should be understood in its common parlance, excluding the entire tea and coffee bushes. The court held that only the yield qualifies as "growing crops" for exemption purposes. Consequently, the court answered the second question in the negative, against the assessee but in favor of the Revenue.

Conclusion:
1. The assessee-individual is entitled to the exemption u/s 5(1)(iv)(a) for their share of agricultural land held by the firm.
2. The entire coffee and tea bushes do not fall within the expression "growing crops" u/s 5(1)(viiia); only the yield (two leaves and a bud for tea, berries for coffee) qualifies for exemption.