1. Settlement Commission order concerning wealth tax valuation and exemptions for immovable properties of erstwhile Maharaja of Jodhpur. (Para 1 )
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2000 Supreme(SC) 1108
SUPREME COURT OF INDIA
M.B.Shah : Ruma Pal : S.P.Bharucha
Gaj Singh
Versus
Settlement Commissioner
Case No. : 895 , 911 of 1991
Date of Decision : 7/19/00
Valuation under Rule I BB applies to years before 1979-80. One-house exemptions are exclusive. Agricultural exemptions require proof, not just statements. Archaeological sites are not archaeological collections for the purpose of exemption under Section 5(1)(xii) of the Wealth Tax Act, 1957.
Headnote:(A) Wealth Tax Act, 1957 - Section 5(1)(iv) and (ivb) - Exemption of house or buildings - Where an assessee opts for exemption for one house under the Act, exemption for another house cannot be claimed under the same provision - Claim for exemption for a building in the vicinity of agricultural land requires proof; mere statements made by a representative are insufficient to establish the requirements for exemption. (Paras 4 and 5)
(B) Wealth Tax Act, 1957 - Section 5(1)(xii) - Archaeological collections - An archaeological site is distinct from an archaeological collection and therefore does not qualify for exemption under this clause. (Para 6)
(C) Wealth Tax Act, 1957 - Valuation of immovable properties - Rule I BB - Applicability to assessment years prior to 1979-1980. (Para 2)
Facts of the case:
An assessee challenged an order passed by the settlement authority concerning the valuation of immovable properties and the validity of exemptions claimed for a palace and a fort under the Wealth Tax Act, 1957.
Findings of Court:
The court held that the valuation of immovable properties should be governed by Rule I BB even for assessment years prior to 1979-1980. Regarding the palace, since one house had already been opted for exemption, no further exemption could be claimed for another dwelling. The claim under agricultural provisions failed due to lack of evidence. Regarding the fort, it was determined that an archaeological site is not an archaeological collection.
Issues: Whether immovable properties are valued under Rule I BB for years prior to 1979-1980; whether a property is exempt under Section 5(1)(iv) or (ivb); and whether a fort is exempt as an archaeological collection under Section 5(1)(xii).
Ratio Decidendi: The exemption for one house is exclusive and cannot be extended to multiple properties. Exemption for agricultural buildings must be supported by evidence rather than representative statements. Archaeological sites are not synonymous with archaeological collections for tax exemption purposes.
Result: The first question is answered in the affirmative and in favour of the assessee. The second and third questions are answered in the negative and in favour of the Revenue.
Legal Category Hierarchy
Table of Contents
2. Assessee claimed exemption for palace as house and another palace under agricultural building clause; revenue disputed applicability. (Para 4 )
3. Assessee already opted for exemption under one clause for one house; cannot claim exemption for another house. No findings on agricultural building claim. (Para 5 )
4. Exemption under Section 5(1)(iv) for one house cannot be claimed for two houses. Fort is not an archaeological collection under Section 5(1)(xii). (Para 6 , 7 )
5. First question answered in favour of assessee; second and third questions answered in favour of revenue. (Para 7 , 8 , 9 )
6. Can an assessee claim exemption under Section 5(1)(iv) for a second house after opting for exemption under Section 5(1)(iii) for another house?
No, once the assessee opts for exemption under one clause for a specific house, exemption cannot be claimed for another house under a different clause. (Para 4 , 5 )
7. Is a fort treated as an 'archaeological collection' for exemption under Section 5(1)(xii) of the Wealth Tax Act?
No, a fort is an archaeological site, not an archaeological collection or book or manuscript, and therefore does not qualify for exemption under Section 5(1)(xii). (Para 6 )
(1) UNDER challenge before us is an order passed by the Settlement Commission in respect of the assessee appellant, Gaj Singh, the erstwhile Maharaja of Jodhpur. Leave was granted restricted to the following three questions:
"1) Whether the immovable properties referred to in para 7 of the Settlement Commissions order should be valued under Rule I BB even for assessment years prior to 1979-1980; 2) Whether the value of the Sardar Samand Palace is exempt from Wealth Tax under Section 5(1)(iv)or(ivb) of the Wealth Tax Act, 1957; 3) Whether the value of the Jodhpur Fort is exempt under Section 5(1 )(xii) of the Wealth Tax Act, 1957;
(2) IT is not in dispute that the first question must be answered in the affirmative and in favour of the assessee,being covered by the decision of this Court in Commissioner of Wealth Tax v. Sharvan Kumar Swarup & Son [JT 1994 (6) SC 446].
(3) AS to the second question, Section 5 of the Wealth Tax Act states that "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.........(iv) one house or part of a house belonging to the assessee......(ivb) one building or one group of buildings owned by a cultivator of, or receiver of rent or revenue out of, agricultural land: Provided that such building or group of buildings is on or in the immediate vicinity of the land and is required by the cultivator or the receiver of rent or revenue, by reason of his connection with the land".
(4) THE assessee opted to adopt the Umed Bhavan Palace as his house for the purposes of exemption under Section 5(1 )(iii), which is specific for the purpose. It is difficult to see how he could seek exemption for another house, namely, the Sardar Samand Palace under Clause (iv).
(5) INSOFAR as Clause (ivb) is concerned, the only material that learned Counsel for the assessee relies upon, is the argument of the assessees representative before the Commission that the Sardar Samand Palace was situated in the Sardar Samand village, in the vicinity of the assessees agricultural land and that it was used as" a dwelling unit, stalls and cattle sheds". The Commission has not delivered any finding in regard to Clause (ivb) because, as is apparent, the claim of the assessee before it was not based thereon. It was only because of the statement of the assessees representative, quoted above, which seemed to meet the requirements of Clause (ivb) that the argument was advanced before us. In any event, a statement of that nature is not proof of any kind. The claim under Clause (ivb) is rejected.
(6) AS to the third question, the argument is that the Jodhpur Fort is exempt under Clause (xii) of Section 5(1). That Clause reads: "any works of art, archaeological, scientific or art collections, books or manuscripts belonging to the assessee and not intended for sale". The Jodhpur Fort is an archaeological site; it is not an archaeological collection or book or manuscript and, therefore, the exemption under Clause (xxii) is not available.
(7) ACCORDINGLY, the first question is answered in the affirmative and in favour of the assessee. The second and third questions are answered in the negative and in favour of the Revenue.
(8) ORDER on the civil appeals accordingly.
(9) NO order as to costs.
