TaxTMI 
TaxTMI 
1984 (10) TMI 90
X X X X Extracts X X X X
X X X X Extracts X X X X
....e of the agricultural lands at Rs. 1 lakh and allowed exemption for the same. However, he valued the arecanut and coconut trees in the agricultural lands at Rs. 1,700 and Rs. 1,07,000 respectively, and treated the same as non-agricultural assets and denied exemption thereof. 3. The AAC accepted the contention of the assessee that the trees are also exempt. The reasoning of the AAC was to the following effect. Section 5(1)(iva) of the Wealth-tax Act, 1957 ('the Act'), exempts agricultural lands from wealth-tax. Section 5(1)(viiib) exempts trees on agricultural lands other than plantation and orchard. As the term 'plantation' has not been defined in the Acts, the meaning attributed to the term in common usage should be taken. A coconut gar....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... of spontaneous growth, which can be cut and sold without affecting the plantation. The coconut and arecanut trees without their fruits have little timber value and it cannot be the intention of the Legislature to tax the value of these trees at the same excluding the value of the fruits standing on the trees. Further, in the case of the assessee, the properties cannot be termed as plantation as the properties consist of eight different blocks with a total extent of 3.34 acres. Apart from this, the assessee has only a one-sixth share in the house compound which is about 58 cents in extent. The coconut trees and arecanut trees are, therefore, trees standing on small compounds and it will not be proper to term them as plantation. 6. As aga....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rpose of clause (viiib) and the value of the trees are not, therefore, exempt from wealth-tax. 7. We have considered the matter. The valuation dates involved in the present appeals are 31-3-1978 and 31-3-1979. The position obtaining under the Act, as applicable to these dates, is as follows : In the definition of the term 'assets' in section 2(e) of the Act, there is no exemption for agricultural lands, growing crops, grass or standing trees, etc. Exemption, if any, was available only under the provisions of section 5(1) subject to the limits prescribed by sub-section (1A) of section 5. Section 5(1), so far as it is relevant for the present purpose, is as follows : " (1) Subject to the provisions of sub-section (1A), wealth-tax shall ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rom the beginning. On the other hand, as contended by the learned departmental representative, it is possible that while originally the Legislature intended to deny exemption to trees in all plantations, subsequently, the Legislature thought it fit that denial of exemption should be confined to trees standing in any tea, coffee, rubber or cardamom plantation. The amendment is not, therefore, decisive. Similarly, we do not think it proper to place reliance on the circumstance that when the Kerala State imposed a tax on plantations, arecanut and coconut gardens were included within the scope of the Act. This circumstance cannot be relied upon to construe the provisions of a Central Act like the Wealth-tax Act. 8. As the term 'plantation' h....
X X X X Extracts X X X X
X X X X Extracts X X X X
....The provisions of clauses (iva), (viiia) and (viiib) of section 5(1) also give an indication in the matter. Under clause (iva), agricultural land is exempt. Under clause (viiia), fruits on trees are exempt. Then comes clause (viiib), which says that trees standing on agricultural lands are also exempt excepting trees in an orchard or a plantation. Thus, in the case of a coconut or arecanut garden the land is exempt. So also are the coconuts and arecanuts. It cannot be that the value of the stems of the trees are not intended to be exempt and that they are to be taxed. It is difficult to work out with a reasonable degree of accuracy, the value of the stem of a coconut or arecanut tree minus the land on which it stands and the fruits which it....