1982 (3) TMI 118 - AT - Wealth-tax

Birds as Animals for Wealth-tax Act Exemption

The Appellate Tribunal ITAT Chandigarh ruled that birds could be considered as animals for the purpose of claiming exemption under section 2(e) of the ... Classification of birds as animals - exemption under section 2(e)(2)(i) of the Wealth-tax Act, 1957 - ordinary dictionary meaning in statutory interpretation - scope of the term 'assets' vis-a-vis excluded 'animals'Classification of birds as animals - exemption under section 2(e)(2)(i) of the Wealth-tax Act, 1957 - ordinary dictionary meaning in statutory interpretation - Whether birds (chickens on a poultry farm) fall within the word 'animals' in clause (2)(i) of section 2(e) of the Wealth-tax Act, 1957, entitling the assessee to the claimed exemption. - HELD THAT: - The Tribunal held that the authorities below were not justified in rejecting the exemption. Clause (e) of section 2 defines 'assets' and expressly excludes, inter alia, 'animals' in sub-clause (2)(i); thus, if birds are included within the ordinary meaning of 'animals' the exemption applies. Although the Act contains no separate definition of 'animals', that absence does not bar application of the ordinary dictionary meaning. The dictionary definitions relied upon by the assessing authorities and the AAC themselves demonstrate that birds are organised, living vertebrates and therefore fall within the concept of 'animals'. The Tribunal further observed that other statutes (referred to in the order) also treat birds as animals, but concluded that even on dictionary/ordinary meaning birds are covered. Consequently the denial of exemption was based on an erroneous narrow construction of 'animals' and was unsustainable. The Tribunal directed that the assessee's claim for exemption in respect of his share in the birds be considered and necessary relief granted.Appeal allowed; the claim for exemption in respect of birds is to be accepted and necessary relief granted.Final Conclusion: The AAC's denial of exemption under section 2(e)(2)(i) for the assessee's share in birds was erroneous; birds fall within the ordinary meaning of 'animals' and the appeal is allowed with directions to grant the claimed relief. Issues:1. Whether birds can be considered as animals for the purpose of exemption under section 2(e) of the Wealth-tax Act, 1957.Detailed Analysis:The appeal before the Appellate Tribunal ITAT Chandigarh involved the issue of whether birds could be classified as animals for the purpose of claiming exemption under section 2(e) of the Wealth-tax Act, 1957. The assessee had filed a return of net wealth for the assessment year 1976-77, claiming exemption on the value of birds and share in an orchard. The WTO and the AAC had denied the exemption, stating that birds were not to be considered as animals under the Act. The AAC upheld the decision based on the absence of a specific definition of 'animals' in the Act, concluding that birds did not fall under this category.The Tribunal analyzed the definition of 'assets' under section 2 of the Act, which includes property of every description but excludes 'animals' as per sub-clause (2)(i). The Tribunal noted that if birds could be categorized as animals, the assessee would be entitled to the exemption. The AAC's reasoning was based on the lack of a statutory definition of 'animals' and the dictionary meaning of the term. However, the Tribunal disagreed with this interpretation, citing the Chambers Twentieth Century Dictionary's definition of 'animal' as an organized being with life, sensation, and voluntary motion. The Tribunal emphasized that birds, such as those in a poultry farm, could be considered as animals based on this definition.Furthermore, the Tribunal highlighted that the ITO had provided a definition of the word 'bird' in rejecting the assessee's claim, describing birds as warm-blooded vertebrates with feathers and wings for flight. The Tribunal noted that even according to this definition, birds could be classified as animals, as vertebrates are a fundamental component of animals. The Tribunal concluded that the ordinary meaning of the term 'animals' encompassed birds, and therefore, the assessee's claim for exemption was wrongly disallowed. Consequently, the Tribunal allowed the appeal and directed that the assessee's claim be reconsidered for the necessary relief to be granted.