1989 (8) TMI 94 - AT - Wealth-tax

Summary

Issues:
Exemption under sections 5(1)(iv), 5(1)(xxii), and 5(1)(xxvi) of the Wealth Tax Act, 1957 for the assessee's remainderman's interest in immovable properties, shares, and bank deposits respectively.

Analysis:
The appeal concerned whether the assessee, an individual, was entitled to exemption under sections 5(1)(iv), 5(1)(xxii), and 5(1)(xxvi) of the Wealth Tax Act, 1957 for her remainderman's interest in immovable properties, shares, and bank deposits settled on trust by late Sir R. J. Vakil. Late Sir R. J. Vakil had settled his properties for the benefit of his son and daughters, including the present assessee. The Wealth Tax Officer (W.T.O.) did not grant the exemption claimed by the assessee, leading to an appeal to the A.A.C. The A.A.C. allowed the exemption based on precedents and directed the W.T.O. to do the same.

The Departmental Representative argued against the exemption, stating that the nature of the assessee's remainderman's interest in the house property did not meet the criteria of "one house or part of a house" as per the Act. However, the representative for the assessee supported the exemption, citing favorable Tribunal decisions and a Madras High Court case. The Tribunal upheld the A.A.C.'s decision in favor of the assessee, emphasizing that the remainderman's interest qualifies as an asset under the Act.

The Tribunal referenced the Supreme Court's interpretation of "belonging" in the context of wealth tax liability, emphasizing the right of the assessee as a remainderman to possess or own the property. It further cited a Delhi Tribunal case and a Madras High Court decision supporting the exemption for a remainderman's interest in immovable property. The Tribunal rejected the argument that such an interest did not constitute "a house" under the Act, asserting that the nature of the right or interest in the property qualifies as immovable property.

Regarding the exemption for the shares and bank deposits, the Tribunal agreed with the A.A.C. that if the exemption for the house property was allowed, there was no reason to deny exemptions for the shares and bank deposits. The Tribunal concluded that the assessee was entitled to exemptions under sections 5(1)(xxiii) and 5(1)(xxvi) for her remainderman's interest in shares and bank deposits, subject to the limits prescribed by the Act.

In conclusion, the Tribunal found no merit in the appeal and dismissed it, affirming the assessee's entitlement to exemptions for her remainderman's interest in immovable properties, shares, and bank deposits as per the Wealth Tax Act, 1957.