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Interpretation of section 5(1)(iv) of the Wealth-tax Act, 1957 regarding deduction for share in house property belonging to a firm. Analysis: The judgment delivered by the High Court of GAUHATI involved a reference from the Tribunal under section 27(1) of the Wealth-tax Act, 1957. The reference was made by the Revenue, questioning the entitlement of the assessee to a deduction under section 5(1)(iv) of the Act for their share in a house property owned by the firm in which they were partners. The Wealth-tax Officer initially rejected the claim, stating that the assessees could not claim ownership of the house owned by the firm. However, the Appellate Assistant Commissioner directed the Wealth-tax Officer to allow the exemption under section 5(1)(iv) for each assessee. The Tribunal upheld this decision, leading to the present reference before the High Court. The counsel for the assessees argued that the issue at hand was similar to a previous decision by the court in CWT v. Tarachand Agarwalla, where it was held that the interest of a partner in the immovable property of a firm should be included in computing their net wealth, making them eligible for the exemption under section 5(1)(iv). The court cited various precedents, including decisions by the Calcutta High Court and the Karnataka High Court, supporting this interpretation. The court emphasized that the net wealth of the firm should be determined, including the value of the building, and then allocated among the partners to calculate their individual net wealth for the purpose of claiming deductions under section 5(1)(iv). The Revenue's counsel contended that the issue in the previous case was different, but ultimately agreed that the principles established in that case applied to the current reference. The High Court, after considering the arguments and precedents, concluded that the decision in Tarachand Agarwalla's case applied to the present case as well. Therefore, the court answered the question in the affirmative, ruling in favor of the assessee and against the Revenue.
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