RAVI MOHAN Vs. COMMISSIONER OF WEALTH TAX

JUDGEMENT

(1.) THE judgment in this case will govern the disposal of Miscellaneous Civil Cases Nos. 524 and 525 of 1984.

(2.) BY these references under Section 27(1) of the Wealth -tax Act, 1957 (hereinafter referred to as 'the Act'), the Income -tax Appellate Tribunal, Jabalpur Bench, has referred the following question of law to this court for its opinion :

(3.) HAVING heard learned counsel for the parties, we have come to the conclusion that this reference must be answered in the negative and in favour of the assessee. As held by this court in Jagdish Chandra Grover v. CWT : [1985]156ITR560(MP) a partner of a firm is entitled to exemption under Section 5(1)(iv) of the Act in respect of the value of his interest in the house property owned by the firm. As regards the question as to whether exemption under Clause (iv) of Sub -section (1) of Section 5 of the Act would be available even for a house used for commercial purposes, learned counsel for the assessee brought to our notice the instructions issued by the Central Board of Direct Taxes, vide letter F. No. 317/23/ 73 -WT, dated July 24, 1973, that exemption under Section 5(1)(iv) of the Act was available even for houses used for commercial purposes. No decision to the contrary was brought to our notice. We see no cogent reason for holding that even after the omission of the words 'and exclusively used by him for residential purposes' by the Finance (No. 2) Act of 1971, exemption under Section 5(1)(iv) of the Act should not be allowed in the case of a commercial house owned by an assessee. In our opinion, therefore, the Tribunal was not justified in refusing the exemption under Section 5(1)(iv) of the Act in respect of the cinema building owned by the firm.