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Section 5(1)(iv) of the Wealth-tax Act, 1957 - Exemptions - Position prior to 1-4-1993 - Whether partner in a firm would be entitled to exemption under section 5(1)(iv) in respect of value of his interest in house property owned by firm even if it was used for commercial purposes - Held, yes Circulars and Notifications : CBDT's letter F.No. 317/23/73 WT, dated 24-7-1973 FACTS The assessee was a partner in a firm which owned a cinema building. While framing the assessment the WTO took into consideration the value of the cinema building. On appeal, the assessee, for the first time, contended that the value of the cinema building owned by the firm was liable for exemption under section 5(1)(iv). The AAC, however, rejected the contention of the grounds that the cinema building was not used for the purpose of the residence of the assessee and that it was owned by the firm and not by the assessee-partner. On further appeal, the claim of the assessee was not upheld by the Tribunal. On reference : HELD As held in Jagdish Chandra Grover v. CWT [1985] 156 ITR 560 (MP), a partner of a firm is entitled to exemption under section 5(1)(iv ) in respect of the value of his interest in the house property owned by the firm. The CBDT vide letter F.No. 317/23/73-WT dated 24-7-1973 issued instructions that exemption under section 5(1)(iv) was available even for houses used for commercial purposes. There was no cogent reason for holding that even after the omission of the words "and exclusively used by him for residential purposes" by the Finance (No. 2) Act of 1971, exemption under section 5(1)(iv) should not be allowed in the case of a commercial house owned by an assessee. Therefore, the Tribunal was not justified in refusing the exemption in respect of the assessee's interest in the cinema building owned by the firm. Note : The decision was in favour of assessee. CASE REVIEW Jagdish Chandra Grover v. CWT [1985] 156 ITR 560 (MP)followed and relied upon. CASE REFERRED TO Jagdish Chandra Grover v. CWT [1985] 156 ITR 560 (MP). K.K. Khosala for the Applicant. B.K. Rawat for the Respondent. JUDGMENT G.G. Sohani, Actg, C.J - The judgment in this case will govern the disposal of…

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