S.K. Kapur, J.
(1) At the instance of the commissioner of Wealth-tax the following question of law has been referred to this Court under section 27(1) of the Wealth-tax Act, 1957 :-
'WHETHERon the facts and circumstances of the case. the value of the interest of the assessed company as a partner in the firm of M/s. Allied Distributors and Co., is includible in its net wealth' ?
(2) The assessed is a private limited company. It has been a partner in a partnership firm M/s. Allied Distributors and Co. with effect from 16th August, 1955. In the return filed by the assessed for the assessment year 1957-58 (the relevant valuation date being 31-12-1956), the assessed showed a sum of Rs. 2,95,337.00 as the value of its share of wealth in the aforesaid firm. The Wealth Tax Officer calculated the value at Rs. 4,47,490.00. The assessed appealed to the Appellate Assistant Commissioner who by his order dated 28th March, 1961, reduced the value of the wealth by Rs. 87.190.00. The assessed as well as the Wealth-tax Officer appealed before the Appellate Tribunal. The Tribunal by its order dated 15th October, 1966, allowed the assessed's appeal and dismissed the appeal of the Wealth-tax Officer. The Tribunal decided that section 4 of the Wealth-tax Act was applicable only to assessment of an individual as distinguished from a company and, thereforee, only an individual partner's interest in a firm could be subjected to wealth tax. In short, the Tribunal held that if a company happens to be a partner in a firm no wealth tax is payable on the interest of the company in such firm. Section 2(c) of the Wealth-tax Act, 1957 defines as assessed to 'mean a person by whom wealth-tax or any other sum of money is payable under this Act. ...... .'Three categories of persons have been added in the definition but it is nto necessary to refer to the same. Section 3 of the said Act is the charging section and provides that 'subject to the other provisions contained in this Act, there shall be charged for every assessment year commencing on and from the first day of April, 1957, a 'tax (hereinafter referred to a wealth-tax) in respect of the net wealth on the corresponding valuation date of every individual, Hindu undivided family and company at the rate or rates specified in the Schedule'. It is thus apparent that unlike Income-tax Act firms have been excluded from the category of assesseds liable to pay wealth tax as a separate unit. Individuals, companies and Hindu undivided families have, however, been constituted as taxable units. Such units have, thereforee, to pay wealth tax on their net wealth as defined in section 2(m) subject to statutory exemptions. Section 4(1)(a) of the said Act artificially includes the assets transferred as the assets of the transferor in specified cases. Section 4(1)(b) does nto include an asset in the hands of a partner which is other- wise excluded from his net wealth but merely prescribes that some asset will be included only to the extent of the value arrived at 'in the prescribed manner.' The emphasis in the clause is, thereforee, nto on inclusion of some excluded asset but on the extent or the value to be included in the hands of an individual partner. Section 4(2) prescribes certain factors to be taken into account while framing rules for such valuation. Section 4(1), thereforee, is directed towards two ends :-
(1)inclusion of some wealth in the hands of the transferor which may otherwise nto be his wealth; and
(2)determination of the quantum to be taxed in the hands of a partner of a firm or a member of an association of persons.
(3) SUB-SECTION (1) of section 4 opens with the words: 'In computing the net wealth of an individual there shall be included, as belonging to that individual. . ..' This shows that section 4(1)(a) and (b) applies only to individuals as distinguished from companies. This follows from the meaning of the word individual and from the distinction maintained between companies and individuals in section 3. Thus far the Tribunal is right in holding that section 4(1)(b) deals only with the cases of individuals and nto of companies. The Tribunal has, however, in my opinion, erred in deciding that a company's interest as a partner in a firm is exempt from wealth tax. Section 2(m) with section 2(e) leaves no room for doubt that a partner's interest in a firm is an asset belonging to the partner and, thereforee, falls within the said provision. Under section 3 a company would, thereforee, be liable to pay wealth tax on its assets in the form of share in a partnership firm. The question is whether section 4(1)(b) has the effect of excluding such assets in the hands of a company. The Tribunal has applied the principle of Expressio unius, exclusio alterius. That principle has no application in this case. Section 4(1)(b) as I have already said, is nto a charging provision. It merely provides a mode of computation of the value of an asset to be taxed in the hands of an individual partner. In other words, it fixes the quantum to be taxed. Even if section 4(1)(b) does nto apply to companies it will nto exclude the operation of sections 2(m) and 3. The provision is nto indication of an intention of Legislature that without section 4(1)(b) a partner's share in a firm is nto taxable.
(4) Mr. Jain, the learned counsel for the assessed, contended that all benefit of ambiguity in a taxing statute should go to the asses- see. True that Courts do nto attribute such expansive qualities to a taxing statute as to bring men and matters nto covered by the express language yet it is equally true that if the plain language of a statute makes an item taxable, it cannto be excluded on conjectural approach. If an assessed comes within the letter of the law he has to be taxed however harsh it may appear to the judicial mind. If he does nto so fall the apparent spirit of the law cannto be brought in aid to tax him. As to how the value of such interest is to be calculated is nto before us and I, thereforee, need nto decide whether rule 2 applies to such computation also or is limited only to the computation of an individual partner's interest in a firm. In my opinion, a company's, interest as a partner in a firm is taxable under section 3 read with section 2(m) of the said Act. I would, thereforee, answer the question in the affirmative and in favor of the Revenue. The Revenue will have its costs. Counsel's fee is fixed at Rs. 100.00.
P.N. Khanna, J.
(5) I agree.