The definition of "agricultural land" in the Wealth Tax Act does not include land that is situated in the heart of a town surrounded by residential buildings and that is not actually being cultivated.

Wasiuddin, J.

1. This is a reference under Sec.27(3) (b) of the Wealth Tax of 1957 (Act 27 of 1957).

2. The relevant facts which have given rise to this present reference may be briefly stated as follows: The assessee was assessed under the Wealth Tax Act for the year 1962-63 for which the relevant date of valuati9n is 31-3-1962. The assessee filed a return disclosing his net wealth of Rs. 1,07,699. The, Wealth Tax Officer determined the total wealth at Es. 5,91,999. He included in this assessment a sum of Rs. 1,50,000 (One lac fifty thousand) representing the value of a plot of land owned by the assessee bearing survey plot No. 794 and situated at Bhat-tacharjee Road, Patna. The assessee contended that this was agricultural land and, therefore, was not liable to assessment under the Wealth Tax Act. The Wealth Tax Officer overruled this objection and as stated above included the value of this land also. The assessee then preferred an appeal before the Appellate Assistant Commissioner for the Wealth Tax and he dismissed the appeal and confirmed the order of the Wealth Tax Officer. The assessee, therefore, preferred an appeal before the Appellate Tribunal, and there also it was contended that the land in question was agricultural and used for agricultural purposes and as such not liable to assessment. The Appellate Tribunal also dismissed the appeal and thereafter an application was filed before the Appellate Tribunal for referring the case to the High Court and this was also rejected. The assessee then moved the High Court and a Division Bench of this Court on 30-8-1966 directed the Tribunal to state the case for the opinion of the Court under Sub-section (3) of Sec.27 of the Wealth Tax Act. The question which was formulated by the Court is as follows:-

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"Whether on the facts and circumstances of the case the Tribunal was justified in holding that the disputed land was not agricultural land on the relevant date for the purpose of Wealth Tax Act."

3. Before I take up the discussion of the facts and the questions of law which are involved in answering this question, I may first of all refer to the relevant provisions of the Wealth Tax Act (hereinafter called as the Act). The charging section is Sec.3 of the Act which lays down as follows:

"Subiect to the other provisions contained in this Act, there shall be charged for every financial year commencing on and from the first day of April, 1957, a tax (hereinafter referred to as wealth-tax) In respect of the net wealth on the corresponding valuation date of every individual, Hindu undivided family and company "at the rate or rates specified in the Schedule."

The tax, is, therefore, payable on the net wealth and so it is necessary to see as to what is the definition of net wealth and assets in the Act. Net wealth is defined in Sec.2(m) of the Act which Is as follows:-

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" net wealth means the amount by which the aggregate value computed in accordance with the provision of this Act of all the assets, wherever located, belonging to the assessee on the valuation date, Including assets required to be included In his net wealth as on that date under this Act, is in excess of the aggregate value of all the debts owed by the as- eessee on the valuation date other than... ..."

There are certain exceptions which do not constitute the net wealth and are given in this section, but it is not necessary to reproduce those here. The word assets has been defined in Sec.2(e) of the Act which runs as follows:-

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" assets include property of every description, movable or immovable, but does not include- (i) agricultural land and growing crops, grass or standing trees on such land;

(ii) any building owned or occupied by a cultivator or receiver of rent or revenue out of agricultural land. Provided that the building is on or in the immediate vicinity of the land and is a building which the cultivator or the receiver of rent or revenue by reason of his connection with the land requires as a dwell