COMMISSIONER OF WEALTH TAX Vs. BANSI LAL AGARWAL

JUDGEMENT

(1.) The Tribunal, Allahabad Bench, Allahabad, has referred following question of law for the opinion of this Court under Section 27(1) of the WT Act: Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the house property at K 46/188, Bishesharganj, Varanasi, where 267 sq. ft. out of the total floor area of 13,250 sq. ft. was used by the partnership firm M/s Agro Dairy Products, while the balance was used by the assessee for its own residence, can be said to have been used by the assessee-family exclusively for its own residence and in that view directing that the value of the property should be determined by applying the provisions of Sub-section (4) of Section 7 of the WT Act, 1957?

(2.) The dispute relates to the asst yr. 1975-76. The assessee is a specified HUF. Besides other property, he owned property at K 46/188, Bishesharganj, Varanasi. The area of the said house property is 13,260 sq. ft. out of which 267 sq. ft. was occupied by M/s Agro Dairy Products, a partnership firm in which the members of the assessee-HUF were partners, while the balance was occupied by the assessee for his residence. Before the WTO, the assessee filed report of the approved valuer who estimated the value of the aforesaid property at Rs. 77,500. It was also claimed that since the property was used exclusively by the assessee for his own residence, the value of the property should be determined keeping in view the provisions of Section 7(4) of the WT Act.

(3.) The said claim was not accepted by the WTO. The assessee was also unsuccessful before the first appellate authority. However, the assessee filed an appeal before the Tribunal. The Tribunal accepted the said claim. Relevant portion of the order of the Tribunal is quoted below: We have carefully examined the rival submissions and the facts on record. From the orders of the authorities below it is clear that the floor area in the said building is 13,250 sq. ft. In about 13,000 sq. ft. the assessee himself resides in it and it is only in respect of 267 sq. ft. that the assessee is having an office of a firm in which he is a partner for which he charges no rent. To say therefore, that the aforesaid building is not being used exclusively for residence would, in our opinion, be not correct. The mere fact that one of the rooms on the ground floor is being used as an office would not cloud the fact that in 13,000 sq. ft. area of the said building the assessee and the members of his family are residing. It would, in our opinion, therefore be correct to regard this property as one which belongs to the assessee and which is exclusively used by him for his residential purpose. The benefit of Sub-section (4) of Section 7 would therefore be correct to freeze the value of the said property at which it was assessed for the asst. yr. 1971-72. The WTO will verify from his record as to what was the value of the said property for the said year and he will substitute this value for the value which has been directed to be adopted by the AAC. The various contentions raised by either side on account of the value of the land, etc. are of no consequence in view of the provisions of Sub-section (4) of Section 7 and, therefore, it is not necessary for the decision of this point to adjudicate as to what would be the correct price of land in the area.