COMMISSIONER OF WEALTH TAX Vs. N THAVAMANI

JUDGEMENT

(1.) IN pursuance of the directions of this court in T. C. P. No. 474 of 1982 the INcome-tax Appellate Tribunal has stated a case and referred the following questions of law under section 27(3) of the Wealth-tax Act, 1957, for our opinion:"1. Whether, on the facts and in the circumstances of the case, the Appellate Tribunal had valid materials to hold that the individual partners of the firm (i.e., the assessee herein) are the real owners of the assets of the firm and hence the exemption under section 5(1)(iv) of the Wealth-tax Act, 1957, was allowable ?.2. Whether the Appellate Tribunal was right in holding that the term 'house' in section 5(1)(iv) of the Wealth-tax Act, 1957, would refer to any building irrespective of the purpose for which it was used ?"The assessee is a partner in a firm called S. M. K. Nataraja Nadar and Sons, Virudhunagar, and the assessee in the course of the assessment proceedings for the assessment year 1974-75 under the Wealth-tax Act, 1957, (hereinafter referred to as "the Act"), claimed exemption under section 5(1)(iv) of the Act in respect of his one-third share in the value of the workshop building.

(2.) THE Wealth-tax Officer, however, held that the immovable properties owned by the assessee were not transferred in the name of the assessee as there was no registered document effecting the transfer. He further held that the workshop building was owned by the firm and not by the partner and in any event the workshop building cannot be regarded as a "house". In this view of the matter, he disallowed the claim of the assessee for exemption under section 5(1)(iv) of the ActTHE assessee filed an appeal before the Appellate Assistant Commissioner and contended that there was a valid transfer of the immovable property by the firm to the partner and the house was used for commercial purpose as well. THE assessee also claimed that the house is jointly owned by the assessee along with the other partners and the proportionate value of each co-owner Would be eligible for exemption.