1990 (2) TMI 125 - AT - Wealth-tax

Summary

Issues:
- Denial of relief under section 7(4) of the W.T. Act, 1957 by CWT(A)
- Interpretation of the term "exclusively used" under section 7(4)
- Eligibility of Hindu Undivided Family (H.U.F) for relief under section 7(4)

Analysis:
The judgment by the Appellate Tribunal ITAT MADRAS-A involved five appeals with common contentions regarding the denial of relief under section 7(4) of the W.T. Act, 1957 by the CWT(A). The appellant, who owned a residential house at Courtallam, sought exemption under section 7(4) for the property, claiming it as the only residential property owned. However, the CWT(A) rejected the claim citing non-continuous residential use and the appellant being a H.U.F residing at various places as reasons. The appellant argued that "used" in section 7(4) did not require physical occupation for all 365 days and that the term "exclusively used" meant reservation of the property for the appellant only. The Tribunal agreed, emphasizing that the property being ready for occupation without being let out was sufficient, and freezing the value as on 1-4-1974 was permissible for one residential house under section 7(4.

Regarding the eligibility of a H.U.F for relief under section 7(4), the Department contended that the section required exclusive use for the whole year, unlike section 23(2) of the I.T. Act. The Tribunal, however, noted that the absence of restrictive language like "parent" in section 7(4) indicated that the provision was not limited to individual assesses. Referring to a Circular from the C.B.D.T., it was established that H.U.Fs were entitled to the benefits of section 7(4). Therefore, the Tribunal held that the appellant, being a H.U.F, should be allowed the benefit of section 7(4) for all the years, rejecting the CWT(A)'s objections.

The judgment did not delve into minor issues in paras 8 to 12, as they were not central to the main contentions of the appeals. Overall, the Tribunal's decision favored the appellant's interpretation of the provisions under section 7(4) and affirmed the eligibility of a H.U.F for the relief, setting aside the CWT(A)'s denial of the same.