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Issues: Valuation of minor's interest in a partnership firm for Wealth-tax assessment.
In this case, the Wealth-tax Officer (WTO) valued the minor's interest in the partnership firm at a certain amount and included it in the net wealth of the assessee. The assessee contended that as a minor admitted to the benefits of the partnership, the value of his share should only be based on his capital contribution and profits. The Appellate Assistant Commissioner (AAC) upheld the WTO's valuation, stating that the provisions of the Wealth-tax Act and relevant rules applied to determine the value. However, the assessee argued that since the minor was not a partner, certain provisions did not apply, and there was no specific provision in the Wealth-tax Act defining a minor as a partner. The Revenue acknowledged that the minor was not a partner but asserted that he was entitled to a share in the profits and property of the firm, which could be valued under the Wealth-tax Act. Upon careful consideration, the Tribunal found that the minor was only admitted to the benefits of the partnership and was not a partner in the firm. It was established that the minor did not have a share in the property of the firm based on the partnership deed's provisions. The Tribunal noted that the minor was entitled only to his share in the profits of the firm and not the property. Therefore, the approach taken by the WTO to value the minor's interest was deemed erroneous. The Tribunal directed the WTO to recompute the wealth of the minor considering only his capital contribution and share in profits. The Tribunal allowed the appeal based on this finding, as no other points were raised during the proceedings.
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