COMMISSIONER OF WEALTH TAX Vs. MAHAL CHAND PANDIA

JUDGEMENT

(1.) AT the instance of the Commissioner of Wealth-tax, the following question has been referred by the Appellate Tribunal under Section 27(1) of the Wealth-tax Act, 1957 ("the Act", for short), in respect of the assessment years 1977-78 to 1980-81 ;

(2.) THE facts : THE assessee, Mahal Chand Pandia, owned a house standing on the land under holding No. 95 of Ward No. 22, at Kharupetia belonging to him. He occupied a part of the house for business purposes (godown) and the remaining part as a residence. THE assessee claimed that exemption under Section 5(1)(iv) should be for the entire unit comprising the residential unit and godown which constituted one building, THE Assessing Officer did not accept the claim and divided the house into residential unit and godown and allowed exemption in respect of one house only. THE assessee took up the matter before the Appellate Assistant Commissioner. Before the Appellate Assistant Commissioner, the assessee contended that the house was to be regarded as one unit as it was within one holding number. THE Appellate Assistant Commissioner held that if the holding was one and house was also one, the same was to be regarded as one house and directed the Assessing Officer to determine the entire value of the house as one for exemption under Section 5(1)(iv). THE order of the Appellate Assistant Commissioner was appealed against to the Appellate Tribunal by the Revenue. THE Appellate Tribunal held that, as only one door number was given, the dwelling unit and the godown were part and parcel of the same building and, therefore, the Appellate Assistant Commissioner was justified in allowing exemption. Hence, this reference.

(3.) SECTION 5(1)(iv) of the Act grants exemption in respect of one house or part of a house belonging to an assessee. The Legislature is speaking of one house or part of a house. It must, therefore, mean what is in law a house, although it is in fact a part of a house, viz., a legal house. SECTION 5(1)(iv) does not contemplate that every room or a single self-contained unit of a house occupied by one person, although not in itself a division, is a separate house in law, namely, a legal house. This being the position, merely because the assessee used the house partly for business purposes (godown) and partly as a residence it cannot be said that they are also separate legal houses or tenements, in the context of the fact-position. In that view of the matter, the Tribunal was justified in upholding the order of the Appellate Assistant Commissioner that both the godown and the dwelling unit would be regarded as one house. Accordingly, the question is answered in the affirmative, that is, in favour of the assessee and against the Revenue.