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TMI Blog1985 (4) TMI 150X X X X Extracts X X X X X X X X Extracts X X X X ..... etermined. 2. On this issue there had been a conflict of decisions as rendered by the Pune Bench of the Tribunal. Briefly put, Kantilal H. Doshi v. ITO [WT Appeal Nos. 37 and 38 (Pune) of 1978-79, dated 21-7-1979] the decision was that the deduction under section 5(1)(iv) was to be allowed in the computation of the net wealth of the partner and not in arriving at the net wealth of the firm for purposes of rule 2. In S.M. Murdande, Ichalkaranji v. WTO [WT Appeal No. 1 (Pune) of 1980, dated 16-9-1980] the aforesaid view was followed. In Pandurang D. Timblo v. WTO [WT Appeal Nos. 132, 133, 135, 136, 179, 180, 183 and 184 of 1981, dated 30-11-1981] having regard to the ratio of decision of the Andhra Pradesh High Court in CWT v. Narendra Ranj ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion was disallowed by the WTO and this view was upheld in each of the years by the AAC. The AAC preferred to follow the decision of the Madras High Court in the case of Purushothamdas Gocooldas v. CWT [1976] 104 ITR 608 in preference to the decision of the Karnataka High Court in the case of CWT v. Mrs. Christine Cardoza [1978] 114 ITR 532 and that of the Orissa High Court in CWT v. I. Butchi Krishna [1979] 119 ITR 8. 4. Before us the learned counsel for the assessee placed reliance on the decisions of the Karnataka and Orissa High Courts relied on before the AAC as also the decision of the Madhya Pradesh High Court in the case of Narsibhai Patel v. CWT [1981] 127 ITR 633 and in particular, the decision of the Bombay High Court in the ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under section 5 of the said Act is not to be considered at the stage of determining the net wealth of the communion is equally sound, and this would be so even if the communion can be regarded, though in our opinion, it cannot be so regarded, as an association of persons. Section 5, which provides for exemption in respect of certain assets, in its opening words under sub-section (1), indicates that exemption is to be considered at the stage of assessment of net wealth of an assessee. We have already seen how under section 3 of the said Act, charge of wealth-tax is made on the net wealth of an individual, HUF and company, which would mean that the assessee contemplated under section 5(1) would be an individual and not the communion, whether ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the computation of the net wealth of an individual who is an assessee and not the firm (if which he may be a partner. Observations in a similar vein are also to be discovered in a decision of the Orissa High Court in CWT v. I. Butchi Krishna [1979] 119 ITR 8 (Ori.). In the said decision it has been observed that a firm is not an assessable entity under the said Act as would appear from section 3 thereof. In the view of the Orissa High Court, the stage at which exemption under section 5(1) has to be given effect to is at the stage of computation of the net wealth of the assessee. The fallacy of the approach of the department has been pointed out by the Orissa High Court at p. 13 of the said judgment. We need not advert to the same here, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Madras High Court in the case of Purushothamdas Gocooldas in the light of the subsequent decision of the same High Court in the case of CIT v. K. Saraswathi Ammal [1981] 127 ITR 404 and it has been held that the partners are entitled to deduction in their hands. The Special Bench decision also makes reference to other relevant pronouncements of the Supreme Court in the cases of Addanki Narayanappa v. Bhaskara Krishnappa AIR 1966 SC 1300 and CIT v. R. M. Chidambaram Pillai [1977] 106 ITR 292 also. In the light of the aforesaid discussion in the Special Bench case referred to, once the conclusion is that the claim for exemption has to be considered in the hands of the partner and not in the hands of the firm, which conclusion we have arrived ..... X X X X Extracts X X X X X X X X Extracts X X X X
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