1983 (1) TMI 111 - AT - Wealth-tax

Summary

Issues:
- Interpretation of exemption u/s 5(1)(iv) and 5(1)(iva) of the Wealth Tax Act, 1957 for a member of a Body of Individuals.
- Assessment of a married couple under the Portuguese Civil Code as separate entities or as a joint Body of Individuals.
- Application of Tribunal and High Court decisions in determining the assessment method for married couples under the Portuguese Civil Code.

Analysis:
The judgment involves four appeals by the department concerning the interpretation of exemptions u/s 5(1)(iv) and 5(1)(iva) of the Wealth Tax Act, 1957 for an assessee who is a member of a Body of Individuals. The primary issue in all four appeals is whether the exemptions should be allowed individually to the full extent to the assessee. The assessee, a member of a communion under the Portuguese Civil Code with her husband, argued that she should be assessed separately for her half share of wealth owned jointly with her husband, claiming full exemptions under the law. However, the WTO assessed the communion jointly as a Body of Individuals, granting exemptions only once and dividing the balance between the spouses. This resulted in the assessee receiving less than the full exemption she would have obtained if assessed separately.

The assessee appealed to the AAC, who directed the WTO to allow exemptions separately to both the assessee and her husband to the maximum extent permissible under the law, citing a Tribunal decision in a similar case. The department challenged the AAC's decision, arguing that the Bombay High Court had held that married couples in Goa governed by the Portuguese Civil Code should be assessed separately, not as a Body of Individuals. The department also contested the Tribunal's decision in a related case regarding the separate allowance of exemptions to spouses.

After considering both parties' arguments and relevant legal precedents, the tribunal upheld the AAC's decision, relying on the Tribunal's previous ruling and the Bombay High Court's judgment. The tribunal dismissed the department's appeals, affirming that exemptions u/s 5(1)(iv) and 5(1)(iva) should be separately allowed to both spouses to the maximum extent permissible under the law when assessing married couples under the Portuguese Civil Code.

In conclusion, the tribunal's judgment clarifies the correct assessment method for married couples under the Portuguese Civil Code, emphasizing the separate allowance of exemptions for each spouse to ensure full compliance with the Wealth Tax Act, 1957.