Law:

Section:

Section 5(1)(iv), read with Section 4(1)(a) of the Wealth-tax Act, 1957 - Exemption - House property - Whether where value of a house property belonging to his wife has been added to assessee's net wealth under section 4(1)(a), assessee is entitled to deduction under section 5(1)(iv) in respect of that house property - Held, yes FACTS For the assessment year 1970-71, the WTO had included certain sum as the value of the house property standing in the name of his wife in the assessee's hands. For the assessment year 1974-75 a similar sum was added as the value of the house property by applying the provisions of section 4(1)(a). While making assessments the WTO allowed a deduction of Rs. 1 lakh for each year in respect of a house or a part of a house belonging to the assessee in terms of section 5(1)(iv) . The Commissioner, by invoking powers under section 25(2), withdrew the deduction on the ground that the said provision had no application in the present case, as the said house property actually belonged to the assessee's wife and not to the assessee himself. On appeal, the Tribunal, however, set aside the Commissioner's order. On reference: HELD In computing the net wealth of an individual the entire assets belonging to an assessee have to be included in his net wealth. Strictly speaking, in the present case, the house property assets did not belong to him. By the extended definition of section 4, these assets had to be included in the assessee's net wealth. Now having included so, the exemptions in respect of those assets, as provided under section 5, could not be denied. In the circumstances, the Tribunal was justified in allowing deduction under section 5(1)(iv)in respect of the house belonging to the assessee's wife. CASE REVIEW CWT v. Agrawal (B.T.)[1987] 163 ITR 72 (Raj), CWT v. Rai (C.)[1979] 119 ITR 553 (Bom), CWTv. Eapen (K.M.)[1978] 114 ITR 415 (Kar) and Naganathan (S.) v. CWT[1975] 101 ITR 287 (Mad)followed and relied upon. CASES REFERRED TO S. Naganathan v. CWT [1975] 101 ITR 287 (Mad.), CWT v. B. T. Agrawal [1987] 163 ITR 72 (Raj.), CWT v. C. Rai [1979] 119 ITR 553 (Bom.), and CWT v. KM. Eapen [1978] 114 ITR 415 (Kar.). H.M. Dhar for the Applicant.…

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