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TMI Blog1994 (9) TMI 12X X X X Extracts X X X X X X X X Extracts X X X X ..... firm in which he was a partner and relief under section 5(1) in respect of the house property owned by the firm?" The brief facts, in which the aforesaid question has arisen as found by the Tribunal, are that the assessee is a partner in the firm of H. C. Patel and Co. Two specific assets owned by the firm are deposits in banks and house properties. For the years 1973-74 to 1976-77, the assessee claimed exemption from payment of wealth-tax under section 5(1) in respect of his share of the bank deposits held by the firm and in respect of the house property owned by the firm. The Wealth-tax Officer held that the above two assets did not belong to the assessee but belonged to the firm. Even though the assessee was a partner in that firm, wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssets held by the firm which may otherwise be not includible in the net wealth of the assessee under section 5(1) of the Act, if he were the owner. We have carefully considered the contention raised before us in the light of the various provisions of the Act. It would be proper to refer to certain provisions of the Act which have a relevant bearing on the controversy. Section 2(e) defines " assets" as assets including property of every description, movable or immovable. . . Section 2(m), which defines net wealth, reads as under: "2. (m) 'net wealth' means the amount by which the aggregate value computed in accordance with the provisions of this Act of all the assets, wherever located, belonging to the assessee on the valuation date, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ets in the event of dissolution of the firm or association, or, in the absence of such agreement, in the proportion in which the partners or members are entitled to share profits. The sum total of the amounts so allocated to a partner or member shall be treated as the value of the interest of that partner or member in the firm or association. . . . (3) Where the net wealth of a firm or association computed in accordance with sub-rule (1) includes the value of any assets referred to in section 5(2) of the Act, the value of the interest of a partner or member shall be deemed to include the value of his proportionate share in the said assets, and the provisions of section 5(2) of the Act shall be applied to him accordingly." From a reading ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to wealth-tax, notwithstanding the fact that no tax is otherwise payable on it or is to be excluded from the computation of net wealth under section 5, merely because of the jointness of ownership. Merely because under the provisions of the Income-tax Act, a firm is treated as a separate assessee, it does not become a separate entity for the purposes of the Wealth-tax Act also, when there is no such provision. Therefore, there is no warrant for treating property under the ownership of an individual and under joint ownership as in a partnership firm for the purpose of computing the net wealth under the Wealth-tax Act, differently. In this connection, it may also be noticed that section 5 speaks of assets not to be included in the net wea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the decision of the Appellate Assistant Commissioner allowing the claim of the assessee for exclusion of the two assets, namely, the bank deposit and the house under sections 5(1)(xxvi) and 5(1)(iv) of the Act, respectively, for computing the value of the assessee's interest in the partnership-firm for the purpose of computing the net wealth of the assessee, taxable under the Wealth-tax Act. It may further be noticed that this position is clear from the insertion of sub-section (4) in section 5 with effect from 1989, which is clarificatory in nature rather than amending the law. Accordingly, we answer the question referred to us in the affirmative, in favour of the assessee and against the Revenue. No order as to costs. - - TaxTM ..... X X X X Extracts X X X X X X X X Extracts X X X X
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