2006 (4) TMI 80 - HC - Wealth-tax

Allowability of deduction u/s 5(1)(iv) in respect of the assessee s share in the land and building of the firm in which he is a partner Allowability of deductions in computing commercial profits for the purpose of capitalization Determination of the value of the property - Since the issue sought to be raised by the Revenue is already covered by the judgment of the jurisdictional High Court, we do not deem it appropriate to refer the question of law to this court again merely because other courts have taken a view different to this court. Once this court has already expressed its opinion on the question of law sought to be raised, there is no valid reason to direct the Tribunal to refer the same question of law to this court - petition is dismissed

Summary

Issues:
1. Whether deduction under section 5(1)(iv) of the Wealth-tax Act, 1957 is allowable for the assessee's share in the land and building of the firm.
2. Whether specific deductions should be allowed in computing commercial profits for the purpose of capitalization.
3. Whether a multiple of 8.33 should be applied for determining the value of the property.

Issue 1:
The petition sought a direction to the Income-tax Appellate Tribunal to refer questions of law regarding the deduction under section 5(1)(iv) of the Wealth-tax Act, 1957 for the assessee's share in the firm's land and building. The court referred to previous judgments establishing that a partner in a firm has a specific interest in the partnership property, and hence, entitled to the exemption. The court cited precedents to support the view that partners can claim a deduction under section 5(1)(iv) of the Act. The Madras High Court also supported this view in relevant cases. The court dismissed the petition as the issue was already covered by the jurisdictional High Court's judgment.

Issue 2:
Regarding the specific deductions for computing commercial profits, the court did not delve into this issue as the main focus was on the deduction under section 5(1)(iv) of the Wealth-tax Act. The court's decision was primarily based on the established principles regarding partners' specific interest in the firm's property and the entitlement to exemptions under the Act. Therefore, no detailed analysis was provided on this issue.

Issue 3:
The petition also raised the issue of applying a multiple of 8.33 for determining the value of the property. However, the court did not address this issue in detail as the main issue of deduction under section 5(1)(iv) was already settled based on previous judgments and established legal principles. The court emphasized that once a jurisdictional High Court has expressed its opinion on a question of law, there is no need to refer the same question again, especially when other courts have taken a different view. Thus, the court dismissed the petition without addressing the issue of applying a multiple of 8.33 for property valuation.

In conclusion, the High Court dismissed the petition seeking a direction to the Income-tax Appellate Tribunal to refer questions of law related to deductions under the Wealth-tax Act, 1957. The court relied on established legal principles regarding partners' specific interest in the firm's property to decide in favor of the assessee. The court emphasized that once a jurisdictional High Court has already expressed its opinion on a question of law, there is no need to refer the same question again, especially when other courts have taken a different view. The dismissal of the petition was primarily based on the settled issue regarding partners' entitlement to deductions under the Act.