1986 (11) TMI 112 - AT - Wealth-tax

Summary

Issues:
- Interpretation of the term 'house' under section 5(1)(iv) of the Wealth-tax Act, 1957.
- Whether a godown can be considered a 'house' for the purpose of granting exemption under section 5(1)(iv).

Analysis:
The case involved multiple appeals by different assessees concerning their claim for exemption under section 5(1)(iv) of the Wealth-tax Act, 1957. The assessees each had a one-sixth interest in a godown and claimed exemption, which was initially disallowed by the WTO. However, the AAC ruled in favor of the assessees, considering the godown as a 'house' and granting them the exemption. This decision by the AAC was challenged by the revenue in the appeals before the tribunal.

The main contention raised by the revenue was that a godown cannot be classified as a 'house' since it is not a dwelling place. The revenue relied on a decision by the Orissa High Court to support their argument. On the other hand, the assessees argued that a godown falls within the definition of 'house' and cited a Supreme Court decision in support of their position.

Upon considering the submissions from both sides, the tribunal delved into the interpretation of the term 'house' under section 5(1)(iv) of the Act. The tribunal noted that the Act does not provide a specific definition of 'house.' Referring to legal sources, the tribunal highlighted that the term 'house' has a broad meaning and is not limited to structures designed for human habitation. It can encompass buildings or sheds used as habitation or shelter for animals, among other interpretations.

The tribunal specifically referenced a Supreme Court decision which established that the term 'house' extends to buildings used for business purposes and is not restricted to mere dwelling houses. Additionally, a circular by the CBDT clarified that the exemption under section 5(1)(iv) is applicable even to houses used for commercial activities. Based on these precedents and interpretations, the tribunal concluded that a godown could be considered a 'house' for the purpose of granting exemption under the Act.

In light of the above analysis and legal principles, the tribunal upheld the orders of the AAC, ruling in favor of the assessees. The appeals by the revenue were dismissed, affirming the decision that the godown could be regarded as a 'house' entitling the assessees to exemption under section 5(1)(iv) of the Wealth-tax Act, 1957.