2001 PLP 1968 (PTD)

Exemption

House

Co-owner entitled to exemption under S.5(1)(iv) in respect of his share of house

Indian Wealth Tax Act, 1957, S.5. A co-owner of a house is entitled to exemption under section 5(1)(iv) of 'he Wealth Tax Act, 1957, in respect of his share of it. C.W.T. v. T.S. Sundararn (1999) 237 ITR 61 (SC) applied. Shambhoo Chopra for the Commissioner. P.K. Mishra for Bharat Ji Agarwal for the Assessee, The Income-tax Appellate Tribunal, Bench Delhi, in compliance with this Court's direction, dated July 17, 1980, under section 27(3) of the Wealth Tax Act, 1957, in Wealth Tax Applications Nos. 47, 46 and 48 of 1980 has referred the following questions for the opinion of this Court: "(1) Whether on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was correct in law in holding that the assessee's share in the additions made in the case of the firth in which he was a partner was not includible in his wealth? (2) Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was correct in law in holding that the assessee was entitled to exemption under section 5(1)(iv) of .the Wealth Tax Act, 1957, in respect of his share in Saraswati Warehousing Corporation?" The aforesaid questions arise out of a consolidated order, dated March 7, 1979, passed by the Tribunal in Wealth Tax Appeals Nos. 1056, 1057 and 1058 (Delhi of 1976-77), for. the assessment years 1973-74, 1974-75. and 1975-76: We have heard Sri Shambhoo Chopra, learned counsel for the Commissioner, and Sri P.K. Mishra, Advocate, holding brief for Bharat Ji Agarwal, learned counsel for the respondent. Admittedly, the additions that were made in the case of the firm were not in respect of any tangible asset and were intangible additions. Under the Wealth Tax Act, what is assessable as the wealth of an assessee is the value of the asset actually owned by him on the valuation date. The Tribunal's finding is that the additions made in the case of the firm were not represented by any assets that could be -included in the net wealth of the assessee. Therefore, the Tribunal was right in holding that the amount of additions made in the case of the firm could not be included in the net wealth of the assessee. We, therefore, answer the aforesaid question in the affirmative, i.e., in favour of the assessee and against the Commissioner. As regards Question No.2, the contention of the Commissioner is that the assessee was not entitled to exemption under section 5(1)(iv) of the Wealth Tax Act in respect of the share in Sarwasti Warehousing Corporation. The said Sarwaswati Warehousing Corporation was not a legal person that could own the property in its own right. The Tribunal found that the assessee was a co-owner of the property and was, therefore, entitled to the exemption finder section 5(1)(iv). The Tribunal's view now stands affirmed by the Supreme Court in CWT v. T.S. Sundaram (1999) 237 ITR

61. Although that is a case of partnership firm the principle laid down by the Supreme Court is equally applicable to other persons who own the property as co-sharer. Therefore, the said Question No.2 is also answered in the affirmative, i.e., in favour of the assessee and against the Commissioner. M.B.A./497iFC Order accordingly.