JUDGMENT
G.C. Bharuka, J.
1. In all these four cases, an identical question of law is involved. Therefore, these cases are being disposed of by a common judgment. The Tribunal has made reference under Section 27(1) of the Wealth-tax Act, 1957 (hereinafter referred to as “the Act”).
2. Tax Case No. 20 of 1980 relates to the assessment year 1974-75 wherein the following question of law has been referred to this court for its opinion :
“Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was justified in law in holding that the value of factory shed and factory office building cannot be deducted to the extent of Rs. 2,49,021 and Rs. 31,023 respectively, from the total assets of the firm while allowing exemption under Section 5(1)(xxxii) of the Wealth-tax Act, 1957, in the case of the assessee relating to the assessment year 1974-75 ?”
3. Tax Cases Nos. 98 of 1984, 99 of 1984 and 100 of 1984 relate to the assessment years 1975-76, 1977-78 and 1978-79 respectively. These cases arise out of a common statement of case drawn up by the Tribunal referring the following question of law to this court for its opinion :
“Whether the exemption mentioned under Section 5(1)(xxxii) of the Wealth-tax Act, 1957, extended to the land and building forming part of an industrial undertaking pertaining to the firm ?”
4. The assessee is an individual. In all these cases, on the relevant valuation dates, the assessee was a partner in a firm styled M/s. Tainwala Engineering and Foundry Works, Ranchi, which owned an industrial undertaking. The assets of the undertaking comprised land and building as well. During the assessment proceedings under the Act for each of the aforesaid assessment years, the assessee claimed that he is entitled to exemption in respect of the value of his interest in the entire assets forming part of the industrial undertaking belonging to the aforesaid firm under Clause (xxxii) of Section 5(1) of the Act. The Income-tax Officer negatived the said claim of exemption to the extent of the value of the lands and buildings.
5. Aggrieved by the order of the Wealth-tax Officer, the assessee preferred an appeal to the Appellate Assistant Commissioner which was allowed.
6. The Revenue went in appeal to the Tribunal but failed. On an interpretation of Clause (xxxii) of Section 5(1) of the Act, the Tribunal took the view that the assessee is entitled to exemption of the value of his interest in the entire assets forming part of the industrial undertaking in question which includes the value of lands and buildings as well.
7. In the present case, the answer to the question revolves entirely on the interpretation of Clause (xxxii) of Section 5(1) of the Act. Therefore, it will be useful to quote the said clause which reads as under :
“5(1). Subject to the provisions of Sub-section (1A), Wealth-tax shall not be payable by an assessee in respect of the following assets , and such assets shall not be included in the net wealth of the assessee ….
(xxxii) the value, as determined in the prescribed manner of the interest of the assessee in the assets (not being any land or building or any rights in any land or building or any asset referred to in any other clause of this sub-section) forming part of an industrial undertaking belonging to a firm or an association of persons of which the assessee is a partner, or, as the case may be, a member ;
Undisputedly, the assessee is entitled to some exemption in respect of the value of his interest in the assets forming part of the industrial undertaking in question but the question precisely is whether this exemption will also extend to the value of the land and building of the industrial undertaking.
The controversy relates to the interpretation of the expressions lying within the brackets of the aforesaid clause. The stand of the Revenue is that the phrase “referred to in any other clause of this sub-section” qualifies only its preceding words “any asset” and not the earlier expression “any land or building or any rights in any land or building”. Counsel for the Revenue then submits that keeping in view the maxim expressio unius est exclusio alterius by necessary implication “any land, etc.” must be deemed to have been excluded from “any asset”. In substance, the stand of the Revenue is that no exemption under Clause (xxxii) is at all admissible to the partner of a firm in respect of the value of his interest in the lands and buildings, etc., owned by the firm and, in respect of any other asset, it is admissible if the same is not referred to in any other clause of Section 5(1).
8. On the other hand, the contention raised by the assessee before the Tribunal was that, if on a plain reading of the clause, he is entitled to exemption, then even at the cost of attributing repetition or tautology to the draftsman, the submission of the Revenue should not be accepted. Properly construed, the submission of the assessee is that it is impermissible to defeat an exemption in a taxing statute by employing intricate rules of interpretation and, in any view of the matter, if two views are possible, then one which favours the assessee should be accepted. It was further submitted that the phrase “referred to in any other clause of this section” also qualifies the expression “any land or building, etc.” Therefore, as per the submission, the value of the interest of the assessee in land and building of the undertaking can be excluded from exemption under this clause only if an exemption in respect thereof has been availed of in any other clause of Section 5(1) which is not the case here.
9. In my view, the approach of the assessee is more in accordance with the rule of interpretation applicable to an exemption clause in a taxing statute. For more than one reason, the question involved deserves an answer in favour of the assessee.
10. Taking the line of least resistance, one has to admit that both the views as advanced by the parties are plausible. In such a situation, it is well-settled that the option should be exercised in favour of the assessee. In the case of Polestar Electronic P. Ltd. v. Addl. CST [1978] Tax LR 1907, [ 1978] 41 STC 409, it has been held by the Supreme Court that (at p. 427 of 41 STC):
“It is a rule firmly established that ‘the words of a taxing Act must never be stretched against a taxpayer. If the Legislature has failed to clarify its meaning by use of appropriate language, the benefit must go the taxpayer. Even if there is any doubt as to interpretation, it must be resolved in favour of the subject.”
11. Further, in the case of Upper India Chamber of Commerced. CIT [1947] 15 ITR 263, (All), it has been observed by Iqbal Ahmad C. J. that (at p. 281):
“It is needless to observe that as, in the present case, we are concerned with the interpretation of an exemption clause in a taxing statute, that clause must be, as far as possible, liberally construed and in favour of the assessee, provided no violence is done to the language used.”
12. Apart from the above reasoning, I am inclined to take the view that, even if there are any repetitions or use of superfluous words in the clause under consideration, those can be justified as having been used by way of abundant caution. These cannot be used as a tool by the Revenue to curtail the ambit of the exemption which is otherwise available to the assessee on a slightly liberal construction. It has been said by the Supreme Court that:
“It is true that as a general rule Parliament may be presumed not to make a superfluous Legislation. The presumption is not a strong presumption and statutes are full of provisions introduced because abundans cautela non nocet (there is no harm in being cautious).” (See Gokaraju Rangaraju v. State of H.P., AIR 1981 SC 1473, at page 1479).
13. Now coming to the submission of the Revenue seeking application of rule of interpretation based on the maxim expressio unius, I may observe that keeping in view the basic rules of interpretation applicable to the taxing statutes, as stated above, the answer to the question referred in this case cannot be founded on this maxim. It was pointed out by Wills J., in Colquhoun v. Brooks [1888] 21 QBD 52, at page 65 (CA) that “this maxim is often a valuable servant, but a dangerous master….”
14. It was next contended by counsel for the Revenue that, looking at the phraseology adopted by the Legislature in the clause in question, it should be presumed that the Legislature had not intended to extend the exemption under the said clause in respect of the value of “land, building, etc.” I am unable to accept this contention as well. In the case of Innamuri Gopalan v. State of A. P. [ 1964 ] 2 SCR 888, 889, it has been held that:
“If the tax payer is within the plain terms of the exemption, he cannot be denied its benefit by calling in aid any supposed intention of the exemption authority.”
15. The view taken by me also finds support from the case of CWT v. D.C. Barley Dharmaraja [1986] 158 ITR 369 (Mad).
16. For all these reasons, I hold that the Tribunal has correctly allowed exemption to the assessee. My answer to the questions referred in all the four cases is in the affirmative, i.e., in favour of the assessee and against the Department. In the circumstances of the case, there will be no order as to costs.
17. Let a copy of this judgment be sent to the Assistant Registrar of the Income-tax Appellate Tribunal, Patna Bench, Patna, under the seal of this court.
G.G. Sohani, C. J.
I agree.