COMMISSIONER OF WEALTH TAX Vs. ABRAHAM K V

JUDGEMENT

(1.) In this batch of five referred cases, the Revenue is the applicant. The common assessee is the respondent. The matter arises under the Wealth Tax Act (in short, the Act) for the assessment years 1967-68, 1968-69, 1969-70, 1970-71 and 1971-72. The following common question of law has been referred for the decision of this Court by the Income Tax Appellate Tribunal in R. A. Nos. 356 to 360 of 1981 in W. T. A. Nos. 137 to 141/Cocb/80 relating to the above assessment years 1967-68 to 1971-72. The question of law runs as follows:

(2.) The Income Tax Officer, as also the Appellate Assistant Commissioner, included in the net wealth of the assessee the value of the residential building standing in the name of the assessee's minor son. This was so done under S.4(1)(a)(ii) of the Act. The assessee claimed exemption under S.5(1)(iv) for the residential building. S.4(1)(a)(ii) which enabled the Revenue to include the value of the residential building standing in the name of the assessee's minor son in the net wealth of the assessee, as also S.5(1)(iv) of the Act, under which the assessee claimed exemption for the residential house, are as follows:

(3.) The inclusion of the value of the residential building standing in the name of the assessee's minor son in the assessee's net wealth was not and cannot be questioned. The only question that arises for consideration is whether the assessee (respondent) is entitled to exemption in respect of the said asset under S.5(1)(iv) of the Act. The Wealth Tax Officer, as well as the Appellate Assistant Commissioner, held that in order to afford the exemption under S.5(1)(iv) of the Act; the house must belong to the assessee (respondent). It is not so in this case. So the exemption cannot be allowed. However, the Appellate Tribunal upheld the claim of the assessee. The Appellate Tribunal referred to the decisions of the Madras and Karnataka High Courts and held that the property included in the net wealth of the assessee by the fiction created by S.4(1)(a) of the Act has to be assumed even for the purpose of S.5(1)(iv) of the Act as belonging to the assessee and the exemption should be allowed in the bands of the assessee. The law so laid down by the Appellate Tribunal is assailed by the Revenue in these referred cases.