COMMISSIONER OF WEALTH TAX Vs. VEERAMACHANENI RATNAM

JUDGEMENT

(1.) In this case, at the instance of the Revenue, the following questions have been referred to us for opinion :

(2.) We are concerned, in the instant case, with the assessment years 1965-66, 1966-67 and 1967-68. The assessee is an individual. In making the assessment for wealth-tax in her case the Wealth Tax Officer included the value of certain assets held by her husband in the assessment of the particular assessee under the provisions of S. 4(1)(a) of the Wealth-tax Act. In particular the value of the house belonging to her husband and financed by the assessee earlier was now included. However, in respect of this very house exemption which was claimed under S. 5(1)(iv) of the Act, was denied by the Wealth-tax Officer on the ground that the owner of the property being the husband, the provisions of S. 5(1)(iv) did not apply in the case of the assessment of the wife.

(3.) The assessee took the matter in appeal before the Appellate Assistant Commissioner and thereafter to the Appellate Tribunal. The Appellate Tribunal remanded the matter back to the Appellate Assistant Commissioner to find out whether the provisions of S. 4(1)(a) of the Act, were at all applicable as such to a residential building. The Appellate Assistant Commissioner, on remand, found that the value of the building was includible but held that the exemption under S. 5(1)(iv) was also available and, hence, the value of the house should be excluded from the net wealth of the assessee. Against this decision of the Appellate Assistant Commissioner the matter was taken in further appeal by the Revenue before the Tribunal and it was contended that the exemption available under S. 5 was available only the transferee and not to the transferor if the transferee was not the assessee. The assessee in this case was the transferor and since the house belonged to her husband, though it was financed by the assessee, it could not be regarded as belonging to the assessee and, hence, entitled to the exemption under S. 5(1)(iv).