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1978 (4) TMI 135 - AT - Wealth-tax

Issues:
1. Valuation of non-agricultural land for Wealth-tax assessments.
2. Exemption claim for machinery used in rice and oil mill.
3. Valuation and exemption of factory building under s.5(1)(iv) of the WTA.

Analysis:
1. The first issue pertains to the valuation of non-agricultural land for Wealth-tax assessments. The assessee valued the land at Rs. 10,000, while the WTO valued it at Rs. 28,350 based on estate duty assessment. However, the Appellate Controller had previously reduced the value to Rs. 10,000 for the Wealth-tax assessment for the preceding year. The Tribunal directed the WTO to reduce the valuation to Rs. 10,000 for the assessment year 1974-75 and Rs. 12,500 for 1975-76 due to the increase in land value.

2. The second issue involves the exemption claim for machinery used in the rice and oil mill. The WTO and AAC denied the claim, stating that the mills were not industrial undertakings. However, the Tribunal, considering the manufacturing and processing activities of the mills, allowed the exemption based on a decision by the Madhya Pradesh High Court. The Tribunal accepted that the machinery in the mills qualified as an industrial undertaking under the Wealth Tax Act, thereby excluding their value from taxable wealth for both years.

3. The final issue concerns the valuation and exemption of a factory building under s.5(1)(iv) of the WTA. The assessee claimed exemption for the building, which was initially granted by the WTO but later revoked by the AAC, stating it did not qualify as a house. The Tribunal, referencing a previous year's valuation, set the building's value at Rs. 1 lakh and considered it a house eligible for exemption under s.5(1)(iv) post-1971 amendment. Citing commentary and a letter from the Central Board of Direct Taxes, the Tribunal upheld the exemption claim for the factory building, concluding that it could be classified as a house under the provision.

In conclusion, the Tribunal allowed the appeals in part, directing adjustments in the valuation of non-agricultural land, granting exemption for machinery in the mills, and upholding the exemption for the factory building under s.5(1)(iv) of the Wealth Tax Act.

 

 

 

 

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