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TMI Blog1997 (11) TMI 42X X X X Extracts X X X X X X X X Extracts X X X X ..... partners of the firm (i.e., the assessee herein) are the real owners of the assets of the firm and hence the exemption under section 5(1)(iv) of the Wealth-tax Act, 1957, was allowable ? 2. Whether the Appellate Tribunal was right in holding that the term 'house' in section 5(1)(iv) of the Wealth-tax Act, 1957, would refer to any building irrespective of the purpose for which it was used ?" The assessee is a partner in a firm called S. M. K. Nataraja Nadar and Sons, Virudhunagar, and the assessee in the course of the assessment proceedings for the assessment year 1974-75 under the Wealth-tax Act, 1957, (hereinafter referred to as "the Act"), claimed exemption under section 5(1)(iv) of the Act in respect of his one-third share in the valu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m exemption under the said provision. It is against this order of the Appellate Tribunal, the Department has sought for and obtained a reference on the questions of law set out earlier. C. V. Rajan, learned counsel for the Revenue, submitted that this court in the case of CWT v. N. Gnanamani [1987] 163 ITR 313 has considered the other partners' claim with reference to the same firm and refused the claim for exemption under section 5(1)(iv) of the Act in respect of the share owned by the said partner in the firm. He, therefore, submitted that since the assessee is a partner in the same firm and since this court has taken the view that the assessee in N. Gnanamani's case [1987] 163 ITR 313 (Mad) was not entitled to claim exemption, the ratio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ani's case [1987] 163 ITR 313 is distinguishable. This court after noticing N. Gnanamani's case [1987] 163 ITR 313 held as under : "... in our view, is not exactly to the point. It has, in fact, considered the case in a different angle altogether, that is when a co-partner claims that a certain immovable property, owned by the firm, has been transferred to him and the answer that even if the properties of a firm are treated as properties held in common by all the partners as a firm is not a legal entity and cannot hold properties, there cannot be a division of the properties purchased in the name of the firm as amongst the partners by making entries in the accounts of the firm without actual dissolution of the firm and that even assuming t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x Act. That apart, this court in R. Venkatavaradha Reddiar's case [1995] 214 ITR 76 has followed several decisions of other High Courts and noticed the earlier decision of this court and then came to a conclusion that the firm has no legal existence and, as such, it cannot hold the property and the partners alone are entitled to claim exemption under section 5(1)(iv) of the Act. In view of the later decision of this court in R. Venkatavaradha Reddiar's case [1995] 214 ITR 76, which was followed in other cases, we are of the view that the Tribunal was correct in holding that the assessee as a partner of the firm is the real owner of the asset and is entitled to claim exemption under section 5(1)(iv) of the Wealth-tax Act. In so far as the s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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