2008 (1) TMI 454 - AT - Wealth-tax

Wealth tax assessment - part of a house belonging to an individual eligible for exemption u/s 5(1)(vi) of wealth tax? - HELD THAT - Both the assessees are enjoying benefit of 50 per cent each i.e. in equal portion of the aforesaid residential property and as such the same would not be subject-matter of wealth-tax. Even the learned Departmental Representative did not dispute the findings of the learned CIT(A) to that extent that the assessees are entitled to deduction and exemption under s. 5(1)(vi) of the WT Act. We do not agree with the submissions of the ld DR because in the case of Goetze (India) Ltd. 2006 (3) TMI 75 - SUPREME COURT , the issue was with regard to claim of deduction otherwise than claimed without filing of the revised return. However, in the present case the assessees did not claim any deduction. The claim of the assessees was with regard to exemption under s. 5(1)(vi) of the WT Act. The aforesaid provision as noted clearly provides that once house or a part of house belonging to an individual shall not be included in the net wealth of the assessee and the assessee shall not be liable to pay wealth-tax thereon. It is a statutory provision contained under the Act and as such the law as it is should have been applied by the AO for granting exemption to the assessees. There is no need for the assessees to seek exemption as per law. Therefore, the decision cited by the ld DR is clearly distinguishable. We further find from the details submitted by the learned counsel for the assessees in the paper book that the assessees did not own any other house or other immovable property for claiming exemption under the Act. Therefore, the finding of the AO was factually incorrect. Thus, we do not find any infirmity in the order of the learned CWT(A). We confirm the same and dismiss all the appeals of the Revenue. Hence, the cross-objections of the assessees stand infructuous and are, accordingly, dismissed. As a result, all the Departmental appeals and all the cross-objections of the assessees are dismissed.

Summary

Issues:
- Departmental appeals challenging exemption under s. 5(1)(vi) of the WT Act for flat value
- Cross-objections by assessee challenging wealth computation for tax levy

Analysis:
1. The judgment involves multiple wealth-tax appeals and cross-objections by the Revenue and the assessee concerning exemption and wealth computation for two assessees. Common issues were heard together and decided collectively.

2. The Departmental appeals contested the CWT(A)'s allowance of exemption under s. 5(1)(vi) of the WT Act for the value of a flat in Mumbai. The assessee's cross-objections challenged the wealth computation for tax levy purposes.

3. Both assessees were beneficiaries of a trust and claimed exemption under s. 5(1)(vi) for a residential flat in Mumbai. The AO included the flat's value in their wealth, but the CIT(A) allowed the exemption after considering the absence of other immovable properties and the statutory provisions.

4. The Departmental Representative argued that the exemption claim should have been made at the assessment stage, relying on a Supreme Court decision. However, the assessees' counsel demonstrated through balance sheets that they had no other immovable properties, justifying the exemption under s. 5(1)(vi).

5. The Tribunal upheld the CIT(A)'s decision, emphasizing that the assessees were entitled to exemption as per the statutory provision, regardless of when the claim was made. The AO's denial was deemed incorrect due to the lack of other properties and the clear provisions of the law.

6. Consequently, the Tribunal dismissed all Departmental appeals and the assessees' cross-objections, affirming the allowance of exemption under s. 5(1)(vi) for the flat in question and the correct wealth computation for tax levy purposes.