Valuation of partner's interest in a firm includes firm land and building when already exempted under another wealth-tax clause.

For valuation of a partner's interest in a firm under section 5(1)(xxxii) of the Wealth-tax Act read with rule 2(1) of the Wealth-tax Rules, the firm's land and building was not to be excluded where that asset had already been exempted under another clause of section 5(1). The exemption under clause (xxxii) was construed in the context of section 5(1) as a whole, so the same asset could not be excluded twice. Accordingly, the partner's share had to be valued by including the land and building forming part of the firm's assets, and the question was answered against the assessee.

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Issues: Whether, for valuation of a partner's interest in a firm under section 5(1)(xxxii) of the Wealth-tax Act, 1957 read with rule 2(1) of the Wealth-tax Rules, 1957, the value of the firm's land and building was required to be excluded.

Analysis: The relevant exemption in section 5(1)(xxxii) was construed in light of the object of section 5(1) as a whole. Where land or building, or an interest in land or building, had already been excluded under another clause of section 5(1), the same asset could not again be brought within the exemption under clause (xxxii). On that construction, the partner's share in the firm had to be valued after including the land and building forming part of the firm's assets.

Conclusion: The value of the firm's land and building could not be excluded while valuing the assessee-partner's interest in the firm under section 5(1)(xxxii) read with rule 2(1); the question was answered in the affirmative and against the assessee.

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