1983 (1) TMI 112 - AT - Wealth-tax

Summary

Issues:
- Interpretation of exemptions 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 spouse under the Portuguese Civil Code separately or as part of a Body of Individuals.
- Applicability of previous tribunal and high court decisions on similar matters.

Analysis:

The judgment dealt with four appeals by the department concerning the same assessee, heard together for convenience. The central issue across all appeals was whether the AAC erred in granting exemptions u/s 5(1)(iv) and 5(1)(iva) of the WT Act individually to the assessee, a member of a Body of Individuals. The assessee, a member of a communion under the Portuguese Civil Code with her husband, contended that she should be assessed separately for her share of wealth jointly owned with her husband. The WTO, however, assessed them jointly as a Body of Individuals, granting exemptions only once, resulting in the assessee receiving less than the full exemption she would have received as a separate assessee.

The assessee appealed to the AAC, citing the Tribunal's decision in Vasudevarao Dempo, where a similar issue was decided in favor of the assessee. The AAC, following the Tribunal's decision, directed separate exemptions for both the assessee and her husband to the maximum extent permissible under the law. The department, aggrieved by this decision, argued that the husband and wife in Goa governed by the Portuguese Civil Code should be assessed separately, as held in CIT vs. Purushottam Gangadha Bhende by the Bombay High Court. The department also contested the Tribunal's decision in Vasudevarao Dempo.

Upon review, the Tribunal upheld the AAC's decision, citing the authority of the Tribunal in Vasudevarao Dempo and the Bombay High Court in P.G. Bhende. The Tribunal dismissed the department's appeals, affirming the separate assessment and granting of exemptions to both the assessee and her husband. The judgment established the precedence of separate assessments for spouses under the Portuguese Civil Code and the entitlement to individual exemptions under the Wealth Tax Act, based on relevant legal interpretations and prior decisions.