Law: Wealth Tax Act, 1957

Section: 7(4),5(1)(iv)

Law: Income Tax Act, 1961

Section: 23(2)

Wealth tax-----Exemption---House used exclusively for residence---Meaning of "exclusively used" --Expression should be interpreted in a practical way--­House- should not be given on rent or used for commercial purposes--­Intention of owner is important---Not necessary that assessee should have actually lived in house for entire prescribed period---Indian Wealth Tax Act, The cardinal law of interpretation is that if the language is simple and unambiguous, it is to be read keeping in mind the clear intention of the legislation. Any addition or subtraction of words is not permissible. It is also not proper to use a sense which is different from what it ordinarily conveys. A mere perusal of section 5(1)(iv) of the Wealth Tax Act, 1957, clearly shows that it will apply only in the case of individual assessments of co-owners and not to the total value of the property jointly owned by the co-owners. Section 5(1)(iv) reads thus: "one house or part of a house belonging to the assessee and exclusively used by him for residential purposes". The purpose should be residential, meaning thereby that it should not be used for commercial or non-residential purposes and it should be used exclusively for residential purposes. The expression cannot be read as "solely for residential purposes". What is to .be seen is whether the intention of the assessee is to live in the house. The expression "exclusive use" should be read to mean that the house should be used for residential purposes meaning thereby that it should not be let out for rent or given on licence or used for commercial purposes. The requirement of exclusive use of the building for residential purposes must, therefore, be construed in a, practical and pragmatic way rather than in a pedantic sense. CWT v. B.M. Bhandari (1980) 123 ITR 554 (AP).fol. Held, that, in the instant case, since there was an intention on the part of the assessee to live in the house or in any part thereof whenever she returned and she had not created any interest in the said property in favour of any other person, that is to say, there was no element of right in property of any other person in the house, and so long as the property was not used…

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