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TMI Blog1984 (10) TMI 9X X X X Extracts X X X X X X X X Extracts X X X X ..... the higher rates specified in sub-para (2) of Part I of Schedule I to the Wealth-tax Act. It may be pointed out that for the purpose of wealth-tax in the case of every Hindu undivided family which has at least one member, whose net wealth assessable for the assessment year exceeds Rs. 1,00,000, wealth-tax is payable by the joint family on its net wealth at the higher rates specified therein. The assessee's contention is that the expression it member " occurring in sub-para (2) of Part I of Schedule I refers to a male member who is a coparcener and not a female member. According to the assessee, as the family did not consist of more than one coparcener and only a female member of the family has wealth exceeding Rs. 1,00,000, the higher rates ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ightly assessed to tax at the higher rate prescribed in the said Finance Act ? 2. Whether, on the facts and in the circumstances of the case, the inclusion of the value of the partnership share under section 4(1)(b) of the Act or under section 2(m) of the Act in the net wealth is correct in law ?" As far as the first question is concerned, an identical question came up for consideration before this court in connection with the levy of income-tax also. In our judgment in S. Venka Reddy v. CIT (R. C. No. 3/81 dated October 26, 1984) (since reported in [1986] 157 ITR 489 (AP),) we upheld the view that the expression " member " occurring in Part I of Schedule I is not restricted to a male member alone. Learned counsel appearing for the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... complete. We may, for purpose of convenience, quote below the provision. " Section 4. (1)-In computing the net wealth of an individual, there shall be included, as belonging to that individual-... (b) where the assessee is a partner in a firm or a member of an association of persons (not being a co-operative housing society), the value of his interest in the firm or association determined in the prescribed manner. " It is clear that the language of section 4(1)(b) authorises the inclusion of the value of the partnership interest where the assessee is a partner in a firm and that authorisation is for purpose of computing the net wealth of an individual. Learned standing counsel for the Revenue draws our attention to the expression ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... do not form part of section 4(1)(b) so as to make it applicable while computing the net wealth of a " Hindu undivided family " also. It must be noted that clause (b) is an indivisible part of sub-section (1) Which has to be read along with the opening part relevant for computing the net wealth of an " individual " only. The Gujarat High Court has also placed reliance on the principle that a Hindu undivided family consists of a plurality of individuals and, therefore, the expression "individual" takes in its sweep a plurality of individuals. This principle may be good for the purpose of holding that an association of persons or a body of individuals constitute an individual for the purpose of wealth-tax, as held by the Supreme Court in CWT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... there is a direct sanction in the charging section itself to levy wealth-tax, it is not necessary to look elsewhere for a sanction to tax the value of partnership interest admittedly owned and possessed by the joint family. We are, therefore, of the view that the Revenue was justified in including in the net wealth of the assessee-family the value of the partnership interest held by it through its karta as forming part of its net wealth under section 3 of the Act. Learned counsel for the assessee then contended that in the event of partnership interest held by a Hindu undivided family being taxed under charging section 3 itself, the valuation of such partnership interest cannot be made in the manner prescribed by rule 2(1) of the Wealth-t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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