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Interpretation of Wealth-tax Act - Exemption under section 5(1)(iv) for residential property gifted to spouse. Analysis: The judgment pertains to a reference made by the Income-tax Appellate Tribunal regarding the entitlement of the assessee to exemption under section 5(1)(iv) of the Wealth-tax Act, 1957, for a residential property gifted to the assessee's wife. The cases relate to wealth-tax assessment for the years 1970-71 and 1971-72, where the value of the house gifted to the wife was included in the net wealth of the assessee under section 4(1)(a) of the Act. The Appellate Assistant Commissioner initially allowed the exemption, which was upheld by the Tribunal, leading to the reference before the High Court. The Appellate Assistant Commissioner's interpretation of sections 4(1)(a) and 5(1)(iv) of the Act was crucial. He opined that if an asset transferred to a spouse is considered as belonging to that individual for inclusion in net wealth, the same fiction should apply for allowing exemption under section 5(1)(iv) if conditions are met. The Tribunal concurred with this view, which the High Court found sound and upheld. The High Court emphasized that under section 5(1)(iv) of the Act, wealth-tax exemption is granted for a house exclusively used for residential purposes belonging to the assessee. Even if a house is transferred to a spouse and included in the net wealth of the assessee, the exemption should be allowed as if the house belongs to the assessee. The court cited a precedent from the High Court of Madras to support this interpretation. Therefore, the court answered the question in the affirmative, favoring the assessee's entitlement to the exemption. In conclusion, the High Court ruled in favor of the assessee, affirming the Tribunal's decision to grant the exemption under section 5(1)(iv) of the Wealth-tax Act for the residential property gifted to the spouse. The court awarded costs to the assessee, including advocate's fee.
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