Wealth Tax-Scope of Sec.5(1)(viiia). - Income Tax - 1331/CBDT

INSTRUCTION NO. 1331/CBDT Dated: May 1, 1980 The board have had an occasion to examine the question as to whether the value of the entire tea bush and plant or the value of tea leaves therein only is exempt u/s.5(1)viiia of the W.T.Act, 1957. 2. Clause viiia of sub section 1 of section 5 of the W.T.Act exempts growing crops on agricultural land and grass on such land. W.e.f. 1-4-76 clause viiib was added granting exemption to trees standing on agricultural lands. In other words upto 31-3-76 only the growing crops and the fruits on trees that are exempt from wealth tax. 3. The first question for consideration is: whether tea bush or plant is a growing crop on agricultural land or fruits on a tree. If it is so then it is exempt. Otherwise not. 4. The board is advised that it is the leaves of the bush or plant only that could be compared with the fruits on a tree or a growing crop on agricultural land. The entire tea bush or a plant cannot be said to be a growing crop on agricultural land or fruits on a tree. The intention of clause viiia appears to be that it is only the produce that is exempt. Accordingly the value of leaves of tea bushes or plants in different tea estates is exempt u/s.5(1)viiia of the W.T.Act and not the value of tea bushes and plants.