9911796707
TMI Blog1991 (6) TMI 121X X X X Extracts X X X X X X X X Extracts X X X X ..... ian company, and in the assessments for the assessment years 1983-84 to 1986-87 it claimed exemption under section 5(1)(xxiii) of the Wealth-tax Act, 1957 in respect of the value of the said shares as detailed below : Assessment year Value 1983-84 Rs. 1,65,000 1984-85 Rs. 1,65,000 1985-86 Rs. 2,65,000 1986-87 Rs. 5,00,000 In the original assessments for the said assessment years the assessee's claim was allowed by the Assessing Officer. 3. Subsequently, taking the line that the status of the assessee being A.O.P., the assessee was not entitled to exemption under the said section, the Assessing Officer passed rectification order under section 35 of the Act and withdrew the exemption earlier allowed to the assessee-trust. 4. The first ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... into the facts of the case. We have considered the rival submissions. It cannot be disputed that the trust or fund in question was created bona fide by MRF Ltd. exclusively for the benefit of the persons employed by it in its tyre manufacturing business. 9. Secondly, unlike under the Income-tax Act, 1961, under the Wealth-tax Act, 1957 an A.O.P. is not identified as a separate taxable entity. Section 3 of the Act, which is the charging section, lists only three taxable entities, namely, individual, HUF and Company. 10. But this does not mean that a trust or other A.O.P. holding taxable assets is totally exempt from wealth-tax---See sections 21 and 21 AA of the Act. Under the scheme of the Act, in the case of a trust, if the shares of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in Part-I of Schedule-I to the Act ; or (b) at the rate of 3% ; whichever course would be more beneficial to the revenue. In other words, considered by itself, section 21(4) of the Act stipulates the rates at which wealth-tax would be levied on entities of the type under consideration. 13. But the matter does not rest there. Proviso (iii), which governs cases of the type under consideration, stipulates that wealth-tax shall be charged at the rates specified in Part-I of Schedule-I of the Act. Thus, the said proviso does away with the concept of benefit to the revenue incorporated in the main part of section 21(4). 14. We then have Explanation 2, which essentially limits the scope of exemption otherwise available to an individual und ..... X X X X Extracts X X X X X X X X Extracts X X X X
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