Firm's voluntary disclosure excluded from partner's net wealth where the statute extends the exemption to partners.

Section 13 of the Voluntary Disclosure of Income and Wealth Act, 1976 extends the benefit of a firm's declaration under section 3(1) to its partners, so the disclosed assets or amount are not to be included in a partner's net wealth or in valuing the partner's interest in the firm. The provision is broad enough to exclude the declared amount in the partner's wealth-tax assessment whether the disclosure is represented by assets or by income not traced to specific assets. On that basis, the amount declared by the firm was held not includible in the partner's net wealth, and exclusion of the amount was upheld.

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Issues: Whether the amount disclosed by a firm under the Voluntary Disclosure of Income and Wealth Act, 1976 could be excluded from the net wealth of a partner of that firm in the partner's wealth-tax assessment.

Analysis: Section 13 of the Voluntary Disclosure of Income and Wealth Act, 1976, read with its Explanation, expressly provides that where a declaration under section 3(1) is made by a firm, the assets or amount covered by the declaration are not to be taken into account in computing the net wealth of any partner or in determining the value of the partner's interest in the firm. The statutory language is broad enough to extend the exemption to the partner when the declaration is by the firm. If the disclosed income is represented by assets, those assets are to be excluded even in the partner's hands; if not so represented, there is no basis for inclusion in the partner's net wealth under the Wealth-tax Act, 1957.

Conclusion: The amount declared by the firm was not includible in the assessee-partner's net wealth, and the exclusion directed in appeal was .

Final Conclusion: The revenue's appeals failed, and the partner obtained relief by exclusion of the impugned amount from net wealth.

Ratio Decidendi: Where the statute expressly extends the benefit of a firm's voluntary disclosure to its partners, the disclosed assets or amount cannot be included in a partner's net wealth for wealth-tax purposes.

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