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TMI Blog1983 (5) TMI 65X X X X Extracts X X X X X X X X Extracts X X X X ..... aim of the assessee for exemption under section 5(1)(iv) of the Wealth-tax Act, 1957 (' the Act '). Therefore, the common issue involved in these appeals is whether the assessee is entitled to exemption under section 5(1)(iv) or not. 2. The assessee's husband, late Shri Gopala Pillai, executed a will on 25-5-1972 bequeathing a property of 10 cents of land and two storeyed building thereon to his three sons with life-interest to the assessee. In the will it was specified that the ownership or the property has to be changed, in the names of three sons after the death of the testator. The value of life-interest was sought to be assessed and, accordingly, the WTO included the life-interest in the net wealth of the assessee. The assessee claim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of the Karnataka High Court in the case of CWT v. K.M. Eapen [1978] 114 ITR 415. In the case of S. Naganathan the Madras High Court held that the benefit of section 5(1)(iv) would be available also where the property transferred by an assessee to his wife was included in the wealth-tax assessment of the husband by reason of section 4(1)(a) of the Act. Similarly the Karnataka High Court has held that where the value of a house transferred by a husband to his wife was to be included in the net wealth of the husband by fiction created under section 4(1)(a), it has to be assumed even for the purpose of section 5(1)(iv) that the house belonged to the husband and that the exemption up to Rs. 1 lakh had to be allowed in the hands of the husban ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not fall within the exempted items of section 2(e). Section 2(e) equates assets with property which is left undefined in the Wealth-tax Act as well as in the Transfer of Property Act, 1882. In the case of J.K. Trust v. CIT [1957] 32 ITR 535, the Supreme Court observed that the word ' property ' is a term of the widest import and subject to any limitation or qualification which the context might require, it signifies every possible interest which a person can acquire hold and enjoy. Therefore, the rights relating to an interest in movable or immovable property are to be taken as assets. In the case of Ahmed G.H. Ariff v. CWT [1970] 76 ITR 471 (SC) it has been held that the right to receive a specified net rent, from wakf estate was property ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e. It further held that even possession of an interest less than that of full ownership could be signified by that word and, accordingly, granted exemption. The Andhra Pradesh High Court has also held likewise in the case of CED v. Estate of Late Sanka Simhachalam [1975] 99 ITR 370. In that case, the deceased had executed a settlement retaining life-interest in the residential house and conveyed the vested remainder to his son, the accountable person. The Madras High Court held that the words ' belonging to ' in section 33(1) though, no doubt, denote absolute ownership, signify even possession of an interest less than that of full ownership if the context so requires. It pointed out that under section 2(15) of the 1953 Act any interest in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the ground taken by the assessee. 7. In the result, the appeals are allowed. Per Miss M. Fatima Beebi, Judicial Member --- While agreeing with the conclusion of the Accountant Member that the assessee is entitled to exemption under section 5(1)(iv), I may add that our conclusion is supported by the view expressed by the Madras High Court recently in CWT v. K. Ramachandra Chettiar [1983] 141 ITR 771. In that case the claim of the assessee, who owned a life-interest in a number of houses, for exemption under section 5(1)(iv) in respect of one of the houses was upheld by the Tribunal and the High Court held that the assessee was entitled to the relief under section 5(1)(iv) pointing out that the life-interest is a fractional interest i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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