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TMI Blog1969 (8) TMI 22X X X X Extracts X X X X X X X X Extracts X X X X ..... s and cars claimed to have been used in connection with the raising of agricultural produce which is tea leaves in this case. In both the assessment years, the Wealth-tax Officer summarily rejected the claim of the assessee under both the sections. Being aggrieved, the assessee preferred appeals before the Appellate Assistant Commissioner. Before the Appellate Assistant Commissioner the assessee furnished a breakup of the different categories of assets for both the years in respect of which exemption had been claimed. Regarding the assessee's claim for exemption under section 2(e)(ii) of the Act, the Appellate Assistant Commissioner held that certain items of buildings were to be exempted under that section. In respect of the five different items, mentioned in the order, the Appellate Assistant Commissioner was of the opinion that since the structures of items Nos. 1 to 3 were entirely used for agricultural purposes, the entire value should be exempted ; but so far as items Nos. 4 and 5 mentioned in the order of the Appellate Assistant Commissioner, he found that these were used both for keeping tractors and other cars and, hence, he allowed 50% of the value of the garages and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 2(e)(ii) of the Wealth-tax Act, 1957. But as regards certain general store-houses for the purpose of storing rice, fuel, tea-chests, etc., the Tribunal found that these store-houses were required for both purposes and in the absence of any clear-cut demarcation on allotment, it allowed 60% of the value of such store-houses as being exempt under the proviso to section 2(e)(ii) of the Act. This was in addition to what had been found to be exclusively used for storing agricultural implements, manure and as stables for cattle utilised for agricultural operations. As regards the assessee's claim for exemption under section 5(1)(ix) of the Act, the Tribunal found that none of the items of machinery included in the list of " machinery used for or in connection with agricultural and other purposes ", nor the lorries and motor cars alleged to have been used both for agricultural and manufacturing operations, could be treated as " tools and implements " within the meaning of section 5(1)(ix) of the Act. On an application being made, the Tribunal has referred to this court under section 27(1) of the Wealth-tax Act, 1957, the following questions : " 1. Whether, on the facts and in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the decision in the case of Kanan Devan Hills Produce Co. Ltd. v. Commissioner of Wealth-tax, we answer it by saying that these may satisfy the description of " tools and implements " under section 5(1)(ix) of the Wealth-tax Act, 1957, but their eligibility for deduction under that section will depend upon the further finding that they are used exclusively for the purposes of raising agricultural produce. We have not been able to find a definite finding on this aspect of the matter by the Tribunal. So far as question No. 3 is concerned, Dr. Pal, appearing on behalf of the assessee, did not press for an answer to that question in this reference. In the premises, we decline to answer that question. The only question that was really canvassed before us is question No. 2. This question is directed to the consideration whether the manager's bungalow, staff quarters and labour lines belonging to the company could be treated as "out-houses" within the meaning of section 2(e)(ii) of the Wealth-tax Act, 1957, and such can be exempted from wealth-tax even though they do not merit exemption on the ground that they are dwelling houses. Section 2(e) of the Wealth-tax Act, 1937 defines " as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xt the expression has been used, it appears to me that the expression " out-house " must be understood in the common dictionary meaning in the sense that it must be connected with or near or built against a main house. It has to be borne in mind that in order to merit exemption under this head it has to be : (a) building which is (b) on or in the vicinity of land and (c) that building the cultivator or the receiver of rent or revenue requires by reason of his connection with the land either as (d) dwelling house or a store-house or an out-house. A house simpliciter, even if it fulfills the other requirements, would not merit exemption unless it qualifies either as a dwelling house or a store-house or an out-house, In that context " an outhouse " must be considered in contradistinction with and in relation to an in-house. An out-house may be aseparate house from adwelling house but it cannot be independent of or unconnected with either a dwelling house or a main building. Dr. Pal, counsel for the assessee, contended before us that the Tribunal has proceeded on the view that inasmuch as the company was incapable of having a dwelling house, on the same reason it was incapable of havin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s nearby. Whether this popular concept of an out-house or even the feudal concept of an out-house in a manorial compound should be introduced in finding a meaning of the same expression used in a totally different context like a modern statute such as the Wealth-tax Act of 1957, is a matter of some thought and consideration. Mr. Pal for the revenue has relied on certain English authorities and some dictionary meaning of the word " out-house ". The Oxford Concise Dictionary, 5th edition, gives the meaning of " out-house " as " house or building or shed belonging to and near or built against a main house ". The dictionary meaning suggests that there is a main house and the out house is with reference to the main house. Stroud's Judicial Dictionary of Words and Phrases, third edition, volume III, gives the same indication of the meaning of the word " out-house ". It quotes the decision of Taunton J., in R. v. Haughton, corresponding to Rex v. Stokes, where the learned judge, at page 1098, expressed the view : " I apprehend that it has been settled from ancient times that an out-house must be that which belongs to a dwelling house, and in some respects parcel of such dwelling house ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lling house ", " store-house ", and " out-house ". All these three are disjunctively put, namely, dwelling house or a store-house or an out-house. Sufficient attention has not been paid in my view to that aspect of the interpretation which raises the question whether there can be an out-house independently of a dwelling house in this context of the statute. The ancient notion of an " out-house " as always an appendage of a dwelling house need not have been expressed in the manner and in the way done in the section. The question is, whether there can be an out-house even where there is no dwelling house. Why can there be no " out-house " in respect of a business house engaged in cultivation of agricultural lands ? Notionally I find it difficult to accept the theory that there can be no out-house without a dwelling house. In that case the section might very well have said immediately after dwelling house " including any out-house ". An out-house in its popular connotation or even in its popular sense, and even on the basis that it is with reference to some other house, it is possible that a store-house or any other kind of house or an office house to have an out-house (sic). If an ou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he matter which negatives the claim of the assessee in a more forceful manner. " Left to myself I find it difficult to accept this view. I find it difficult to accept that a cultivator must always be a human being and not a company. If the word " his " in section 2(e)(ii) of the Wealth-tax Act is meant to indicate the gender, then I would say that the legal gender does not follow necessarily the biological gender. It is well known in interpretation Acts, General Clauses Act and as a principle of construction, that the masculine includes the feminine and vice versa. Surely, the word " his" would not confine the " cultivator " under section 2(e)(ii) of the Act only to a male cultivator to exclude a female cultivator. In such circumstances, pronouns such as this, even if it be in a masculine form, would include a feminine and necessarily a neuter like an artificial person or company. There is more cogent reason to include a company in the interpretation of the word " cultivator " in that section of the Act. That reason is that a company or an incorporated company is an assessee and its assets are liable to be taxed under the Wealth-tax Act. But this kind of an interpretation confi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ten are to cultivate lands. The Wealth-tax Act is a modern statute of 1957. It follows some of the essential modern notions on the subject, not only in India but elsewhere in the world. The interpretation, therefore, must be made in that context. In that view, to confine " cultivator " to a human being would be, in my mind, to put the clock back. Left to myself, I would hold that a cultivator would include an incorporated company whose business is agricultural cultivation. The observations quoted above, being those of a Division Bench, would have compelled us normally to refer this question to a Full Bench for a decision. But, fortunately the learned judge making those observations expressly said that " we do not propose to base our decision on that aspect of the matter ". Therefore, those observations were obiter. They do not form part of the ratio decidendi of that case to be binding on this Division Bench. It is needless to point out that the word " cultivator " has not been defined in the Wealth-tax Act. An appropriate meaning should therefore be given to the word " cultivator " in the whole context of the Act. I am not unmindful of the consideration of what in the Indian co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er, three major conditions laid down in the statute which must, of course, be satisfied under section 2(e)(ii). The first is that the building must be on or in the immediate vicinity of the agricultural land, which I call the condition of vicinage. The second condition is that " reason of his connection with the land ", which I call the condition of connection. The third is that it must be required as such on those conditions and which I call the condition of requirement. Provided those conditions are satisfied, the question will depend thereafter on the facts of each case. On the fourth question relating to electrical machinery, batteries, transmission lines, grinding machinery, etc., and motor cars and lorries and how far they can be treated as " tools and implements ", I agree with what has been said already on this point by my learned brother. The learned counsel for the assessee has not pressed motor cars and lorries to be a part of the tools and implements under section 5(1)(ix) of the Wealth-tax Act. His argument was confined mainly to the rest of the items concerning electrical machinery, batteries, transmission lines, grinding machinery, etc. The relevant decision on thi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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