COMMISSIONER OF WEALTH TAX Vs. MUTHU ZULAIKHA

JUDGEMENT

(1.) THE matter has been referred to us by a Division Bench of this court, before which the tax reference came up for hearing, as it was not inclined to agree with the decision rendered by an earlier Division Bench of this court in the case of CWT v. V. T. Ramalingam, 1993 201 ITR 839, and felt that the matter requires reconsideration by the Full Bench. Accordingly, to have an authoritative view of law, the following question of law has been referred for our consideration :

(2.) THE assessee, an individual, filed the returns for the assessment years 1979-80 and 1980-81 claiming that she is entitled for the benefit of 1/3rd share in accordance with the provisions contained in section 7(4) of the Wealth Tax Act, 1957 (hereinafter referred to as the "Act"). THE Wealth Tax Officer rejected the claim and found that though the assessee is a co-owner, since the house which she had exclusively used for residential purposes throughout the period of 12 months preceding the valuation date, was not an independent residential unit, she is not entitled for the benefit of the provisions of section 7(4) of the Act. On appeal, the Commissioner (Appeals) allowed the appeal holding that the test of exclusiveness of the user of the house must be determined with reference to the question as to what was the assessee's user of the house where she was a co-owner and, therefore, exemption under that section was admissible. Aggrieved by this, the revenue preferred an appeal before the Income Tax Appellate Tribunal (hereinafter referred to as "the Tribunal") and the Tribunal, on consideration, held that the assessee will be entitled for the privilege of having the market value of that portion under section 7(4) of the Act since exemption under section 7(4) of the Act was admissible, following the decision in the case of V. N. Nichani v. Wealth Tax Officer (W. T. A. Nos. 447, 448 and 449 (Mad) of 1974-75, dated 23-3-1978).

(3.) IN CWT v. V. T. Ramalingam, 1993 201 ITR 839, the Division Bench held that the assessees had not even put forward any claim that at least a portion of the house, referable to their shares, were in the occupation of the assessees and the members of their families for residential purposes. The Tribunal had also not found that some portions referable to the shares owned by the assessees were in their use, as and for their residence, with the members of their families. He has not been able to show that he is the owner of the house. Under the circumstances, the interpretation given in that case cannot be applicable to the facts of the case on hand. Admittedly, in this case, the house of the co-owner/assessee was not given for rent or used for commercial purposes. As such, applying the interpretation given in that case is not correct.