Law:

Section:

Section 5 of the Wealth-tax Act, 1957 - Exemptions - Assessee owned and occupied a house for her own residence along with her husband 'M' and family - 'M' as director of a company, received every month certain sum in lieu of rent-free accommodation, and passed it on to assessee - WTO rejected assessee's claim for exemption under section 5(1)(iv) on grounds that she had been assessed to income-tax on this income and that she was sharing her house with 'M' who was her tenant - Whether since 'M' systematically passed on amount received by him from company to his wife every month, character impressed by company on payment made by it to 'M' as house rent allowance continued to attach to it even when 'M' paid it to assessee, and thus, by virtue of said payment 'M' used house in right of a person who was paying assessee for his residence in that house - Held, yes - Whether as house was used by assessee not only for her residence but also to earn income in nature of payment made by 'M' to her, it could not be said that it was used by assessee for residential purposes only, and, therefore, assessee was not entitled to exemption under section 5(1)(iv) - Held, yes Words & Phrases : Words 'for residential purposes' appearing in section 5(1)(iv) FACTS The assessee owned a house and occupied it for own residence. Her husband 'M' had also been residing with her as a member of her family from 1959 onwards. Her husband received a certain sum per month from the company in which he was the working director, as compensation for its inability to provide him with a rent-free house 'M' passed on the said amount to the assessee. In the assessment year 1963-64, this was treated as the assessee's income from her house property. In the assessment year 1964-65, the WTO rejected her claim for exemption from payment of Wealth-tax) on her house property, on the grounds that the she was sharing the house with her husband who was her tenant, or alternatively, she was living with him in a rented house at a concessional rent being paid by the husband, and that she had already been found to have earned income from her house property in the income-tax proceeding. On second appeal, the Tribunal…

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