Commissioner of Wealth Tax vs Gurdeep Singh

By The Court

At the instance of Revenue, the following question of law has been referred for the opinion of this Court :

"Whether on the facts and in the circumstances of the case, the Tribunal was justified in law in directing that deduction under s. 5(1)(iv) be allowed to the assessed to the extent of Rs. 1 lakh after taking into account the assessor�s share in the immovable property consisting of land and building belonging to the firm Autopins (India) Regd. in which the assessed was a partner ?"

This Court in Commissioner of Wealth Tax Vs. A.K. Tandon and others, , has held that a firm has no legal existence and as such it cannot hold any property. It is the partners who own the partnership property or assets. Therefore, it is only fair that they alone should have the benefit of the exemption under s. 5(1)(iv) when their individual assessments are taken up which will include their respective shares in the net wealth of the partnership firm.

The ratio in the case of A. K. Tandon (supra) also covers the commercial properties as well. In respect of commercial properties reference may also be made to the circular issued by Central Board of Direct Taxes No. 317/23/73-WT, dt. 24th July, 1973, wherein for the purpose of s. 5(1)(iv) no distinction has been made between a residential house and commercial properties. A reference may also be made to a decision of Patna High Court in Commissioner of Wealth Tax Vs. Smt. Shushila Devi Tamakuwala, .

Following the said decision, we answer the question in affirmative, against the Revenue and in favor of the assessee. No costs.