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TMI Blog2000 (7) TMI 62X X X X Extracts X X X X X X X X Extracts X X X X ..... e necessary facts in brief which give rise to the question are as under: The assessee, an individual, filed the returns for the assessment years 1979-80 and 1980-81 claiming that she is entitled for the benefit of 1/3rd share in accordance with the provisions contained in section 7(4) of the Wealth-tax Act, 1957 (hereinafter referred to as the "Act"). The Wealth-tax Officer rejected the claim and found that though the assessee is a co-owner, since the house which she had exclusively used for residential purposes throughout the period of 12 months preceding the valuation date, was not an independent residential unit, she is not entitled for the benefit of the provisions of section 7(4) of the Act. On appeal, the Commissioner of Income-tax (Appeals) allowed the appeal holding that the test of exclusiveness of the user of the house must be determined with reference to the question as to what was the assessee's user of the house where she was a co-owner and, therefore, exemption under that section was admissible. Aggrieved by this, the Revenue preferred an appeal before the Income-tax Appellate Tribunal (hereinafter referred to as the "the Tribunal) and the Tribunal, on consideratio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourt in CWT v. V. T. Ramalingam [1993] 201 ITR 839 and submitted that though the ownership of a house or part of a house might include the right to use the house or part thereof, in order to avail of the benefit of exemption under section 5(1)(iv) of the Act, the mere existence of the right would not suffice but the actual exercise of the right of user must also be made out. On the other hand, Mr. P. P. S. Janarthana Raja, submits that the meaning of the word, "exclusive" is to be seen, i.e., the intention to live in the house is important and necessary, and the house should have been used for residential purposes throughout the period of 12 months preceding the valuation date. He relied on the decision of the Allahabad High Court in CIT v. Rani Kaniz Abid [1972] Tax LR 587. In that case, section 23(2) of the Income-tax Act, 1961, was considered. In that case, the assessee owned a house in Karachi and used to go there very often and even though the assessee's daughter and son-in-law resided in that place, it was held that it cannot be said that the assessee was not in occupation of the house as owner in her residence. So also, the Andhra Pradesh High Court in CWT v. B. M. Bhandar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the assessee" is referable to the ownership of the house. It was also submitted that in the case of a lease, there is an element of transfer of property and in the case of licence, there is a withdrawal by the owner on conditions of payment of a fee, from occupation and the use is not exclusively by him. In CWT v. V. T. Ramalingam [1993] 201 ITR 839 (Mad), the Division Bench held that the assessees had not even put forward any claim that at least a portion of the house, referable to their shares, were in the occupation of the assessees and the members of their families for residential purposes. The Tribunal had also not found that some portions referable to the shares owned by the assessees were in their use, as and for their residence, with the members of their families. He has not been able to show that he is the owner of the house. Under the circumstances, the interpretation given in that case cannot be applicable to the facts of the case on hand. Admittedly, in this case, the house of the co-owner/assessee was not given for rent or used for commercial purposes. As such, applying the interpretation given in that case is not correct. We have heard learned counsel on both s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o exclude altogether occupation of the house by any other person and in the absence of the assessee, in any period of 12 months immediately preceding the valuation date. A mere perusal of section 5(1)(iv) of the Act clearly shows that it will apply only in the case of individual assessments of co-owners and not to the total value of the property jointly owned by the co-owners. Section 5(1)(iv) reads thus : "One house or part of a house belonging to the assessee and exclusively used by him for residential purposes." The purpose should be residential, meaning thereby it should not be used for commercial or non-residential, and it should be used exclusively for residential purposes. So, the argument of learned senior standing counsel for the Revenue that it should be read as "solely for residential purposes by the assessee" is not acceptable. What is required is that the house should have been exclusively used by him for residential purposes throughout the period of 12 months immediately preceding the valuation date meaning thereby it should not have been let out for rent or for the use of commercial purposes. In the instant case, the assessee is the co-owner and the right of t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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