1994 (9) TMI 27 - HC - Wealth-tax

Summary

Issues:
Interpretation of section 5(1)(iva) of the Wealth-tax Act, 1957 regarding exemption for agricultural lands inheritance.

Analysis:
The judgment pertains to a case where the Tribunal referred a question regarding the entitlement of an assessee to a deduction under section 5(1)(iva) of the Wealth-tax Act, 1957. The applicant, the wife of a deceased individual, inherited a share in agricultural lands along with her sons. The dispute arose when the Wealth-tax Officer denied full exemption to the assessee, arguing that exemption should be proportionate to her share. However, the Appellate Assistant Commissioner and the Tribunal held in favor of the assessee, granting full exemption of Rs. 1,50,000 under section 5(1)(iva) of the Act.

The primary issue for consideration was whether the assessee is entitled to full exemption under section 5(1)(iva) or only a portion based on her share in the inherited agricultural lands. The court noted that the section does not specify any requirement regarding the extent of agricultural land ownership for claiming the exemption. Referring to previous decisions, including those of the Karnataka and Madhya Pradesh High Courts, the court emphasized that if the assessee is the owner of agricultural lands, full exemption of Rs. 1,50,000 should be granted under section 5(1)(iva).

In conclusion, the court upheld the Tribunal's decision, ruling in favor of the assessee and granting full exemption of Rs. 1,50,000 under section 5(1)(iva) of the Wealth-tax Act, 1957. The judgment highlighted the importance of ownership of agricultural lands as the key factor in determining the entitlement to exemption under the relevant section.