JAGDISH CHANDRA GROVER Vs. COMMISSIONER OF WEALTH TAX

JUDGEMENT

(1.) THIS reference, under Section 27(1) of the Wealth- tax Act, 1957, at the instance of the assessee/applicant is on the following question of law:

(2.) THE material facts are these. THE assessee, as an individual, declared his taxable wealth at Rs. 64,245 and claimed exemption in respect of a house valued at Rs. 44,000, for the assessment year 1976-77. THE Wealth-tax Officer rejected the claim for exemption on the ground that the house did not belong to the assessee but to a partnership firm, M/s. National Soap Industries, Jabalpur, of which the assessee was a partner and thus added Rs. 44,000 to the net wealth of the assessee. In the appeal preferred by the assessee before the Appellate Assistant Commissioner, his contention with regard to the aforesaid exemption was negatived. Further appeal to the Income-tax Appellate Tribunal by the assessee also failed. THE Tribunal held that the assessee was not entitled to claim exemption of the house property belonging to a partnership firm as it did not represent wealth of the assessee in the firm. THE Tribunal, however, accepted the plea of the assessee that the house, which is not residential, but is used as a factory, could be given exemption under Section 5(1)(iv) of the Wealth-tax Act and that such exemption is not restricted to a house used for residential purposes.

(3.) THE view expressed herein is equally applicable with full force for the purposes of exemption under Section 5(1)(iv) of the Wealth-tax Act and any further discussion would be a mere repetition. In coming to the conclusion, this court followed the decisions of the Karnataka High Court in CWT v. Mrs. Christine Cardoza [1978] 114 ITR 532 and of the Patna High Court in CWT v. Nand Lal Jalan [1980] 122 ITR 781 and distinguished the view taken by the Madras High Court in the case of Purushothamdas Gocooldas v. CWT [1976] 104 ITR 608, which has been relied on by the learned standing counsel for the Revenue. We see no reason to take any contrary view than the one taken by this court in Narsibhai Patel's case [1981] 127 ITR 633 and, with respect, we may add that we are unable to persuade ourselves to follow, the view expressed by the Madras High Court in Purushothamdas Gocooldas' case [1976] 104 ITR 608, Consequently, the question referred is answered in favour of the assessee and against the Revenue as under :