Law:

Section:

Section 5(1)(iv) of the wealth-tax act, 1957 read with rule 2 of the wealth-tax rules, 1957-Exemption-Residential house-Firm, consisting of two partners, owned a house used by partners for residential purposes-Assessee claimed exemption of value of said house-ITO rejected assessee's claim-AAC and tribunal confirmed sale-Whether impugned exemption admissible under law-Held, yes Facts The assessee, an individual, was one of the two partners in a firm. For determining his net wealth, his interest in the firm was includible. Besides other assets, one of the assets owned was a house, which was being used by both the partners for their residence. For the assessment year 1969-70 (valuation date being 26-3-1969), the assessee claimed exemption of the value of the said house under section 5(1)(iv ). The WTO negatived the same, holding that the house was owned by the firm and not by the assessee. The AAC and the Tribunal confirmed the WTO's order. On reference: Held 1. Rule 2 of the Wealth-tax Rules envisages the determination of the net wealth of the firm, the purpose being to determine the value of partner's interest in it. It cannot be again said that, during the continuance of the partnership, no partner can say that any particular part of the firm's assets were his assets but certainly he can always say that he, together with his other partners, is the owner of the assets possessed by the firm. He may not be able to say that a particular asset of firm belongs to "me", but he can always say that the firm's assets belong to "us". 2. When the assessment is of the net wealth of a partner which, under the rules framed under the Act, is determined by first determining the firm's net wealth, it would be wholly unreal to leave out the exemptions which its partner would be entitled for assessment of his net wealth. It cannot but be said that, even though during the subsistence of a partnership, assets thrown into the partnership by the partners get merged together and lose their identity, but all the same, the assets as a whole do belong to the partners. In computing the firm's net wealth, by reference to rule 2, if a partner qualifies for any of the statutory exemptions,…

Deprecated: trim(): Passing null to parameter #1 ($string) of type string is deprecated in /home/digixyei/sldsystempk.com/view/master-layout/view_case.php on line 492