Demand in respect of wealth-tax on agricultural land. - Income Tax - 351/CBDT

INSTRUCTION NO. 351/CBDT Dated: December 7, 1971 Attention is invited to Board's Instructions No.335 dated 25-10-71 issued vide D.O.F.No.314/24/70-W.T. It is necessary to maintain a separate account of the demand raised in respect of wealth-tax on agricultural land, etc. and the collections made against such demand. Accordingly, such demand and collection would have to be separately entered in the Notice of Demand, Challan, D CR and the DCR. As the existing forms do not provide for the separate accounting of demand and collection in respect of Wealth-tax on agricultural land etc. they are being revised. The printing of these revised forms would take some time. In the meanwhile, it would be necessary to make adjustments in the existing forms to facilitate separate posting of demand and collection pertaining to Wealth-tax on agricultural land, etc. and that on other assets. The Board, therefore desire that the following procedure should be adopted with immediate effect for this purpose:- (i) The existing Challan(W.T.N.S.4) should be modified one way for use in relation to demand of wealth-tax on agricultural land, etc. and another way for use in relation to Wealth-tax on other assets. Accordingly, two challans would be issued if the net wealth consists of both agricultural and other assets. Rubber stamps for making these modifications should be used. (ii) In the existing D CR, it would be necessary to make two separate entries in respect of an assessee whose net wealth consists of both agricultural land, etc and other taxable assets. It is, therefore, desired that the D CR should have two parts i.e. Part-I and Part II. In Part I, the following two types of cases should be entered:- a) The entire demand/collection where net wealth consists only of taxable assets other than agricultural land. etc. b) The demand/collection in respect of taxable assets other than agricultural land, etc. if the net wealth consists of these assets as well as agricultural land, etc. In part II of the Register cases of the following types should be entered:- a) The entire demand/collection in cases where the net Wealth consists only of agricultural land, etc. b) The demand/collection in respect of agricultural lands etc., where the net wealth consists both of non-agricultural and agricultural assets. Where, in relation to a case with net wealth comprising both of agricultural and non-agricultural assets, entries are made in both parts of the D CR, cross-references should be given. It should also be ensured that such an assessment, although entered in both parts, is counted only as one assessment. iii) While it will not be necessary to bifurcate the DCR into two Parts, as would be done in the case of D CR, it would nevertheless be necessary to indicate in the D CR whether the collection pertains to the entries in part I or part II of the D CR. For this purpose the only change required would be in respect of column No.2 of the DCR which mentions "No. in the Demand Register." Here against the number in the Demand Register, it should be indicated whether the number pertains to Part I or II of the D CR eg., serial No.3 of Part I of the D CR may be mentioned as 3(I) and serial No.3 of Part II as 3(II). 2. It has already been laid down in Board's letter No.314/24/70-W.T. dated 10-11-71 that the demand relatable to wealth-tax on agricultural assets in a case consisting both of agricultural and non-agricultural assets should be calculated by first computing the average rate of agricultural assets. In other words, agricultural wealth-tax will bear the same ratio to the total tax as the agricultural assets bear to the total assets of the assessee. For the purpose of computing the demand relatable on the wealth-tax on agricultural land, etc, the amount of additional wealth-tax should be excluded from the total demand unless the agricultural land; included in the net wealth, itself is located in an urban area and its value has been included for the purposes of calculating additional wealth-tax. 3. The existing columns in the D CR and the DCR do not provide for separate entries in respect of additional wealth-tax. It has been necessary, in the past to collect chargewise statistics relating to the levy of additional wealth-tax from all the Commissioners, and such information may have to be gathered in future also. To facilitate the collection of such information, it is desired that in the existing form of D CR and the DCR separate columns should be inserted by hand with immediate effect, till the revised forms are printed, to show the demand/collection in regard to levy of additional wealth-tax. 4. The above instructions may kindly be brought to the notice of all the officers working in your charge and it should be ensured that these are implemented with immediate effect.