COMMISSIONER OF WEALTH TAX Vs. LAKSHMIKUTTY AMMA N

JUDGEMENT

(1.) At the instance of the Revenue, the Income tax Appellate Tribunal has referred the following question of law, for the decision of this Court:

(2.) The respondent is an assessee to wealth tax. We are concerned with the assessment years 1974-75 to 1978-79. One Gopala Pillai, the assessee's husband, executed a will. The assessee obtained life interest over a two storeyed building situated in Quilon. The ownership of the property vested with the three sons after the death of the testator - Gopala Pillai. The Wealth Tax Officer brought to tax the life interest of the assessee over this property. The assessee claimed exemption under S.5(1)(iv) of the Wealth Tax Act in respect of this property. The claim was rejected by the assessing authority. In appeal, the said decision was confirmed. In second appeal, the Appellate Tribunal held, that under S.2(e) of the Wealth Tax Act, "assets" includes property of every description movable and immovable and the life interest of the assessee over the two storeyed building related to an interest in an immovable property and so taken in by the definition "assets". Since the life interest was included in the net wealth of the assessee, the assessee was entitled to claim exemption under S.5(1)(iv) of the Wealth Tax Act, as the property "belongs to the assessee" within the meaning of S.5(1)(iv) of the Act. The Appellate Tribunal relied on the decision of the Calcutta High Court in Controller of Estate Duty v. Jyotirmoy Raha (112 I.T.R. 969) and the decision of the Madras High Court in Commissioner of Wealth Tax v. Ramachandra Chettiar (141 I.T.R. 771). Thereafter, at the instance of the Revenue, the question of law formulated hereinabove, has been referred for the decision of this Court.

(3.) We heard counsel. In Ramachandra Chettiar's case (141 I.T.R. 771), the Madras High Court held that life interest in property is an "asset" within the meaning of Wealth Tax Act and the assessee having a life interest in house property has interest in the house itself and so entitled to exemption under S.5(1)(iv) of the Wealth Tax Act. We fully concur with the said decision. The above decision was followed by the Madras High Court in Janardhanan v. Commissioner of Wealth Tax (165 I.T.R. 144). We also find that the decision of the Andhra Pradesh High Court in Controller of Estate Duty v. Estate of Late Sanka Simhachalam (99 I.T.R. 370) and also the decision of the Calcutta High Court in Jyotirmoy Raha's case 112 I.T.R. 969) are relevant and useful in considering the scope of S.5(1)(iv) of 'the Wealth Tax Act, especially the term "belonging to" occurring in S.5(1)(iv) of the Act.