COMMISSIONER OF INCOME TAX Vs. URMILA DEVI

JUDGEMENT

(1.) The Income-tax Appellate Tribunal, Delhi, has referred the following question of law under Section 27(1) of the Wealth-tax Act, 1957, hereinafter referred to as "the Act" for the opinion to this court : "Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the assessee would be entitled to deduction of Rs. 1,00,000 under Section 5(1)(iv) against the value of her share in M/s. Amarpali Cinema in which she was a partner ?"

(2.) The respondent-assessee is a resident-individual. The assessment years involved are 1974-75, 1975-76 and 1976-77 with respective valuation dates being March 31, 1974, March 31, 1975 and May 31, 1976. At the assessment stage the assessee claimed exemption to the tune of Rs. 1,00,000 in respect of land and building belonging to the firm, M/s. Amarpali Cinema, Meerut, wherein the assessee was a partner having 20 per cent. share in the profits/losses. The exemption was claimed under Section 5(1)(iv) of the Act, but the Assessing Officer negatived the claim with the reasoning that the assessee was not the owner of the land and building since it belonged to the firm. At the first appellate stage the assessee got the desired relief and the matter having been carried to the stage of the Income-tax Appellate Tribunal, the Revenue met failure.

(3.) We have heard Sri A. N. Mahajan, learned counsel for the Revenue, and Sri R. S. Agarwal, learned counsel appearing for the respondent-assessee.