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TMI Blog1985 (4) TMI 156X X X X Extracts X X X X X X X X Extracts X X X X ..... ur vs. ITO the decision was that the deductions under s. 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 purpose of r. 2. In W.T.A. No. 1/PN/1980 dt. 16th Sept., 1980 in Shri S. N. Murdande, Ichalkaranji vs. WTO the aforesaid view was followed. In W.T.A. Nos. 135, 136, 179, 180, 132, 133, 183 and 184 of 1981, dt. 30th Nov., 1981 in Shri Pandurang D. Timbol, Anr. vs. WTO, Margao, having regard to the ratio of decision of the Andhra Pradesh in CWT vs. Narendra Ranjalker (1981) 129 ITR 203 (AP), it was held that the deduction should be allowed in arriving at the net wealth of the firm which was to be computed in terms of r. 2. This view came to be considered ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as High Court in the case of Purushothamdas Gocooldas Ors. vs. CWT in preference to the decision of the Karnataka High Court in the case of CWT vs. Mrs. Christine Cardoza (1978) 114 ITR 532 (Kar) and that of the Orissa High Court in CWT vs. I. Butchi Krishna. 4. Before us the ld. counsel for the assessee placed reliance on the decisions of the Karnataka and Orissa High Court relied on before the AAC as also the decision of the Madhya Pradesh High Court in the case of Narsibhai Patel vs. CWT (1981) 20 CTR (MP) 43 : (1981) 127 ITR 633 (MP) and in particular the decision of the Bombay High Court in the case of CWT vs. Vasudeva V. Dempo (1981) 131 ITR 291 (Bom). 5. The ld. Departmental Representative, on other hand, relied on the decision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 in AOP. Sec. 5, which provides for exemption in respect of certain assets, in its opening word under sub-s. (1) indicates that exemption is to be considered at the stage of assessment of not wealthy of an assessee. We have already seen how under s. 3 of the said act, charge of wealth-tax is made on then wealth of an individual HUF and company, which would mean that the assessee contemplated under s. (5)(1) would be an individual and not the communion, whether a communion be regarded as a BOI or an AOP. In the view of the matter, the stage at which exemption is to be considered and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a decision of the Orissa High Court in CWT vs. I. Butchi Krishna. In the said decision it has been observed that a firm is not an assessable entity under the said Act as would appear from s. 3 thereof. In the view of Orissa High Court, the stage at which exemption under s. 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, as, in our opinion, the statutory provisions are clear and do not admit of any further or more elaborate discussion." In our view, on a consideration of the statutory provisions, the decision of the Bombay High Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sion of the same High Court in the case of CIT vs. K. Saraswathi Ammal Ors. (1981) 127 ITR 404 (Mad) 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 case of Adanki Narayanappa vs. Bhaskara Krishnappa AIR 1966 SC 1200 and CIT vs. R.M. Chidambaram Pillai 1977 CTR (SC) 71 : (1976) 106 ITR 292 (SC) 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 at on the basis of the decision of the Bombay High Court ..... X X X X Extracts X X X X X X X X Extracts X X X X
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