Levy of wealth-tax on agricultural lands etc. - Income Tax - 231/CBDT

INSTRUCTION NO. 231/CBDT Dated: October 21, 1971 Section(s) Referred: 2(e) Statute: Wealth Tax Act, 1957 Attention is invited to the amendment to the wealth-tax Act, 1957 made by section 24 of the Finance Act 1969 whereby w.e.f. 1-4-70 agricultural lands, etc were included in the definition of assets in clause(e) of sec.2 of the wealth-tax Act and were accordingly made liable to wealth-tax subject to the exemptions available. 2. By a majority judgement dated 28th September 1970 their lordships of the Punjab and Harayana High court at Chandigarh have in respect of civil writ No.2673 of 1970 issued a direction to the effect that the W.T.Act as amended by the Finance Act, 1969 in so far as it includes the capital value of the agricultural land for the purpose of computing net wealth ultra vires the constitution of India. The principle under-lying the decision has not been accepted by the Board and a petition for leave to appeal to Supreme Court has been moved. 3. In respect of cases falling within the jurisdiction of High courts other than Punjab and Harayana High court, the instructions already issued for the levy of wealth-tax on agricultural lands etc. from time to time may be followed and the W.T.officers should go ahead with the W.T.Assessments in such cases. However in respect of cases falling within the jurisdiction of the Punjab and Harayana High court where the decision in the case of Harbhajan singh is binding on the wealth-tax officers no further action, not even by way of survey of agricultural lands etc., in the direction of assessment of wealth-tax on agricultural assets should be taken unless the decision of the Punjab and Harayana high court is reversed or unless the Supreme Court gives a different decision in the matter in any other case. Necessary instructions in this regard may be issued by the Commissioner of Wealth-tax, Punjab, Patiala and Delhi-III New Delhi to his subordinate officers.