1987 (4) TMI 116 - AT - Wealth-tax

Summary

Issues:
- Entitlement to deduction under section 5(1)(iv) of the Wealth Tax Act for a proportionate share in a cinema building owned by a partnership firm.
- Interpretation of relevant case laws and High Court decisions regarding the deduction eligibility for partners of a firm under section 5(1)(iv) of the Act.
- Application of the maximum prescribed limit of Rs. 1 lac for the deduction under section 5(1)(iv) to partners of a firm.

Analysis:
In this second appeal, the main issue revolves around the entitlement of the appellant to a deduction under section 5(1)(iv) of the Wealth Tax Act for his proportionate share in a cinema building owned by a partnership firm. The appellant contested the decision of the ld. CWT (Appeals), Agra, which denied the deduction. The assessment year in question is 1980-81. The Tribunal noted that in a similar matter for the assessment year 1981-82, relief was granted to co-owners, including the appellant, under section 5(1)(iv) for the same cinema building. The Tribunal dismissed the Revenue's appeals in that regard. The appellant relied on various High Court decisions supporting the deduction eligibility for partners of a firm under section 5(1)(iv), including cases from Calcutta, Madhya Pradesh, Karnataka, and Patna High Courts, as well as a Special Bench decision. The Tribunal also referred to a decision in the case of Sat Narain Khanna vs. WTO, emphasizing the availability of the exemption to partners of a firm.

The Tribunal highlighted that the relief granted under section 5(1)(iv) cannot exceed the maximum prescribed limit of Rs. 1 lac. It was emphasized that if a partner has already availed the maximum benefit under this provision, granting further relief would contravene the statutory provisions. The Tribunal clarified that relief under section 5(1)(iv) is applicable to partners of a firm for assets jointly owned by them, not exceeding the prescribed limit. The Tribunal concluded that the appellant was entitled to the deduction under section 5(1)(iv) for the property of the firm, subject to the maximum limit of Rs. 1 lac. As a result, the appellant's contention was allowed, and the appeal was upheld.