1. The revenue has preferred this bunch of five appeals against consolidated order dated 29-11-1980 of the Commissioner (Appeals). By the said order, the Commissioner disposed of appeals relating to the assessment years 1965-66 to 1974-75. We are concerned with only appeals relating to five assessment years.
2. 1965-66 to 1969-70 are the assessment years concerned. 31st March immediately preceding each assessment year is the corresponding valuation date. The assessee is an individual. She had been a partner in a partnership firm, styled Gulab Singh Sethi & Sons. The said firm made some time in December 1975 a declaration under the provisions of Voluntary Disclosure of Income and Wealth Act, 1976 ("VD Act"), disclosing an income of Rs. 31 lakhs, stated to have been earned during the account years relevant to the assessment years 1961-62 to 1974-75.
Block assessment in respect of the said voluntary disclosure was made by the ITO and tax was charged accordingly from the firm.
3. On the basis of the said disclosure of income by the firm, the TAG in the individual partner's assessments included an amount of Rs. 3,44,000 in the computation of the assessee's net wealth. At the same time the I AC observed in the assessment order that this wealth will later be excluded if the assessee fulfils the conditions laid down in the Voluntary Disclosure Scheme, 1975.
4. The assessee went in appeal to the Commissioner (Appeals) and raised three contentions as enumerated in the AAC's order. Third contention read "he (the IAC) has not pointed out any specific ground or reason for this inclusion." The AAC taking into consideration the contentions of the assessee directed the IAC to exclude the impugned amount from computation of the assessee's net wealth.
5. The revenue is aggrieved. Hence these appeals. Learned departmental representative urged that in view of Jamna Prasad Kanhaiyalal v. CIT [19S1] 130 ITR 244 (SC), it is only the declarant who can be given the benefit of exemption and not any other party. In the present case, it was pointed out that it was not the assessee who made the declaration or voluntary disclosure, but a firm in which the assessee was a partner and that firm was a separate entity. We see no force in the revenue's contention. Section 13 of the VD Act contains the relevant provision as regards exemption from wealth-tax in respect of assets specified in declaration. Explanation to Section 13(1) reads as under : Explanation : Where a declaration under Sub-section (1) of Section 3 is made by a firm, the assets referred to in Clause (i) or, as the case may be, the amount referred to in Clause (ii) shall not be taken into account in computing the net wealth of any partner of the firm or, as the case may be, in determining the value of the interest of any partner in the firm.
6. The said Explanation leaves no doubt that if the firm as per columns 4, 5 and 6 of entry No. 6 of Form B of the voluntary disclosure, as prescribed under Rule 4 of the Voluntary Disclosure of Income and Wealth Rules, 1975, show that the income disclosed by the declarant firm included any assets, whether represented by cash, bank deposits, bullion, investment in shares, debts due from other persons, commodities or any other assets, the same had to be detailed by the declarant firm and consequence of the aforesaid Explanation would be that even in the hands of the partner of the firm such assets would be exempt from wealth-tax. If, on the other hand, the income disclosed by the declarant firm was not represented by any assets as aforesaid, then there would be no room for including the impugned sum in the computation of assessee-individual partner's net wealth even by virtue of Section 4(1)(b) of the Wealth-tax Act, 1957 read with Rule 2 of the Wealth-tax Rules. In conclusion, we see no merit in the revenue's appeals and no justification to disturb the AAC's finding. The revenue fails.