COMMISSIONER OF WEALTH TAX Vs. INDER SHARMA

JUDGEMENT

(1.) The ITAT has referred the following question of law for the opinion of the High Court under Section 27(1) of the Wealth Tax Act, 1957 :-

(2.) The Assessee is an owner of a commercial flat in Himalaya House, New Delhi. Exemption under Section 5(1)(iv) of the Wealth Tax Act, 1957 was claimed by the assessee in respect of this flat. The W.T.O. did not allow assessee's claim on the ground that the ownership in respect of this flat did not vest with the assessee as no registered deed of Conveyance had been executed in his favour. In the assessee's appeal, the CWT (A) has directed the WTO to allow exemption under Section 5(1) (iv) of the Act from the value of the flat. The department went in appeal to the ITAT which has upheld the order of the CWT(A) and also held that requirement under Section 5(1) (iv) is that the property in question should belong to the assessee and that the term 'belonging' covered rights less than full ownership.

(3.) Mr.Sandeep Khanna, the learned senior standing counsel for the Department has submitted that the law of Wealth tax stands on a footing little different from the law of Income tax. Wealth-tax is attracted to the assets held by an assessee. The burden lies on such assessee to establish if he comes within the exemption laid down under Section 5. In the case at hand the assessee has himself included the value of the flat in his assets liable to the payment of Wealth-tax. However, to be entitled to an exemption under Section 5(1) (iv), the dwelling unit and the land appurtenant thereto must be "belonging to the assessee". As there is no registered deed of conveyance executed in favour of the assessee, the unit cannot be called one belonging to him and hence would not be entitled to exemption.