Law:

Section:

SECTION 5(1)(iv) OF THE WEALTH-TAX ACT, 1957 -EXEMPTION-HOUSE-WHETHER EXEMPTION AVAILABLE FOR INCOMPLETE HOUSE OR HOUSE WHICH IS UNDER PROCESS OF CONSTRUCTION-HELD, YES, IF CONSTRUCTION HAD REACHED THE STAGE OF HABITABILITY ON VALUATION DATE, OTHERWISE NOT Facts The assessee, who started construction of a house in the assessment year 1972-73, and completed the same in the assessment year 1975-76, had invested Rs. 59,000 up to 31-3-1973 and Rs. 79,690 up to 31-3-1974, the dates being the relevant valuation dates for the assessment years 1973-74 and 1974-75, respectively. In the assessment for these two years, the assessee claimed exemption in respect of the said house under section 5(1)(iv), which was rejected by the WTO, on the ground that the house being incomplete, it could not be considered to be a house within the meaning of section 5(1)(iv). On appeal, the AAC sustained the order of the WTO on the ground that an incomplete house was not fit for human habitation. On further appeal to the Tribunal, the assessee contended that the word "house" in section 5 should be given a liberal construction, and that, as the provision covered part of a house, even a house under construction should be exempted. He further contended that the test of habitation was no more applicable in view of the amendment of section 5(1)(iv) with effect from 1-4-1972 by which the words "and exclusively used by him for residential purposes" were omitted. The Tribunal held that the exemption under section 5(1)( iv) provided for a pattern of investment including the provision of one house for every assessee, and that the construction of a house could not be discouraged by denying exemption in the course of such construction. It, accordingly, allowed the claim of the assessee. On reference: Held The word "house" has no statutory definition and, therefore, has to be given the common parlance meaning. The dictionary meaning of the word is "building for dwelling in, a building in general, a dwelling place". It also has the meaning of abode, habitation, etc. Though the concept of residence has been omitted from section 5(1)(iv) by the amendment with effect from 1-4-1972, "house" or "part of a…

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