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TMI Blog1987 (10) TMI 121X X X X Extracts X X X X X X X X Extracts X X X X ..... e property. The WTO enquired of the assessee why a value of Rs. 11,50,000 should not be adopted in place of Rs. 1,65,000 returned by the assessee. The submission of the assessee was that there was no intention as on 31-3-1981 i.e., the valuation date, to sell property in question and the question of adopting the value of sale which took place later did not arise. Alternatively, the submission was that since the assessee was living along with his mother in the said residence, the value of the property should be frozen under section 7(4) of the Wealth-tax Act. The WTO stated that he did not see any force in the contention of the assessee. The question of freezing the value under section 7(4), according to him, did not arise because the provis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it with any debts. After her death the house was to go to the assessee. He, therefore, submitted that the assessee had a vested right in the property throughout and under the provision of section 7(4) of the Wealth-tax Act, it should be considered that the house belonged to the assessee. He further submitted that the assessee was physically residing in the house with his mother and, therefore, it was exclusively used by him for residential purposes. 4. The learned Departmental Representative, on the other hand, relied on the decision of the Madras High in R. Janardhanan v. CWT (1987) 165 ITR 144 and submitted that the madras high court has considered Court the provisions of section 5(1)(iv) of the Wealth-tax Act where also the language w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll go to my first son, Dr. U. Vasudeva Rao." The Madras High Court in the case of R. Janardhanan has observed as under : "Whether be the right that was given to Ranganayaki Ammal, she had no right to encumber the same during her lifetime. If really a life interest of the usual type with a vested remainder on others in the property was given to Ranganayaki Ammal, there could be no restriction on dealing with that right. This is because it will be inconsistent with the right conferred on the lady. It may be that even in the case of a life interest any encumbrance or dealing with the property would not ensure beyond the lifetime of the lady. In the light the of the restriction on the enjoyment of the right of the restriction on the enjoyme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rty was gifted by a person to his children and he continued to stay there and eventually died, the value of the property was held to be correctly included in the hands of the deceased under the provisions of section 10 of the Estate Duty Act since it could not be held that the donees had assumed possession and enjoyment of the property which was a the subject matter or gift to the exclusion of the donor. However, when it came to the question of husband and wife, the Calcutta High Court, under the Estate Duty Act observed in Mrs. Shamsun Nehar Mansur v. CED (1969) 71 ITR 301 as under : "The distinguishing features of the Supreme Court decision in Georeg Da Costa v. CED from the present reference before us can be stated outright and broadly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in question, it should be held that there were certain rights in him in regard to the property. We are, however, unable to agree. The living of the deceased with his wife in the building is consistent with their relationships and not because that he retained any interest in the property, namely, in the superstructure which he had absolutely gifted to his wife. There are no words in the deed of gift to support any theory that he reserved any interest in the property to himself. Under the circumstances we see no reason for directing any reference. This application fails and is dismissed with costs. Advocate's fee Rs. 150." 9. In the Wealth-tax Act, there is no question of 7(4) becoming applicable only in the event of another person's right ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f exclusively used by the deceased for his residence" alone was exempt. Under the provisions of section 7(4), the words used are exclusively used by him for residential purposes". According to the learned counsel, the terminology under the Wealth tax Act is must wider in scope and concept and the benefit of section 7(4) would be applicable even where a house belonged to the assessee and was used for residential purposes by him though he did not physically reside there. We do not dwell on this any further since we have already held that on the facts of the present case, the assessee would be entitled to the benefits of section 7(4). We, therefore direct that the pegged value under section 7(4) be taken for this assessment year for the value ..... X X X X Extracts X X X X X X X X Extracts X X X X
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