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TMI Blog1995 (7) TMI 141X X X X Extracts X X X X X X X X Extracts X X X X ..... sp; Rs. 18,53,438 ------------- Rs. 21,85,838 Less: Exemption including exemption of one house restricted to Rs. 5,00,000 in terms of section 5(1A) of the W.T. Act, 1957 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The excess was brought to wealth-tax like any other taxable asset. The assessee submitted before the CIT(A) that in respect of assets covered by section 5(1) of the Wealth-tax Act, the excess over Rs. 5 lakhs should be considered only for the purpose of rate. In other words, no wealth-tax was payable on such excess. The CIT(A) dismissed the contention briefly saying that he did not find any basis for such an argument advanced on behalf of the assessee. The assessee is now in appeal before us. 5. The learned counsel for the assessee submitted before us that the assessee's contention could be appreciated only by proper analysis of the relevant provisions of section 5, sub-sections (1), (1A), (2) & (3) of the Wealth-tax Act. For the sake of convenience, we are re-producing the relevant extracts below : " 5. (1) Subject to the provisions of sub-section (1A), wealth-tax shall not be payable by an assessee in respect of the following assets, and such assets shall not be included in the net wealth of the assessee :-- (IA) Nothing contained in sub-section (1) shall operate to exclude from the net wealth of the assessee any assets referred to in clauses (iv),(xv), (xvi), (xxii), (xxiii) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ayable' but the value'shall be included in computing the net wealth of the assessee'. It was only because of such a distinction that both the phrases had been used in subsection (1) of section 5 of the Wealth-tax Act. 7. On the other hand, sub-section (3) of section 5 made a special provision for payment of wealth-tax. This has again made it clear that inclusion in net wealth and payment of wealth-tax were distinct issues. 8. The learned counsel, thereafter, invited our attention to the words used in sub-section (I A) of section 5 of the Wealth-tax Act. According to him, the specified assets in excess of Rs. 5 lakhs were included in the net wealth, but there was no specific provision for charging wealth-tax in the sub-section itself. Thus, the treatment should be same as the treatment given to assets covered by sub-section (2) of section 5. In other words, these specified assets, covered by sub-section (IA) in excess of Rs. 5 lakhs, were to be included in the net wealth only for rate purposes, and no wealth-tax was chargeable on them. He submitted that direction should be issued to the Assessing Officer to recompute the wealth-tax accordingly. 9. In support of his contention, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... when an asset forms part of the net wealth, it is mandatory to charge wealth-tax as per the charging provisions of the Wealth-tax Act. There is no escape from it, unless there is a specific provision such as the provision contained in sub-section (2) of section 5. In absence of such a provision, it must follow that once the asset is included in the net wealth, wealth-tax is also chargeable. 14. We may mention that if the distinction drawn by the learned counsel for the assessee is followed strictly, then with regard to the assets covered by sub-section (3) of section 5, wealth-tax is payable without the assets being included in the net wealth. This is an absurd result. 15. Similarly, in section 4(1)(a) of the Wealth-tax Act it is provided that certain assets will be included in the net wealth of an individual but there is no mention regarding the levy of wealth-tax. It will be an absurd proposition that these assets will be included only for rate purposes and no wealth-tax will be payable on them. 16. The decision of the Supreme Court in the case of CWS (India) Ltd. has been relied upon by both the sides. We, therefore, reproduce the relevant extracts from it : " While we agre ..... X X X X Extracts X X X X X X X X Extracts X X X X
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