9911796707
TMI Blog1994 (3) TMI 54X X X X Extracts X X X X X X X X Extracts X X X X ..... stage of determination of net wealth of the association of persons in which the assessee was a member, before its allocation amongst the members, for fresh disposal by the Wealth-tax Officer in the light of the decision of the Appellate Tribunal (Special Branch), Pune, in the case of N. R. Karia [1985] 13 ITD 545 ?" The brief facts of the case as stated in the statement of the case drawn up by the Appellate Tribunal and as available from the annexures to the said statement of case are that the assessees, Ramniwas Karwa and Shyam Sundar Karwa, claimed that they are entitled to exemption under section 5(1)(iv) of the Wealth-tax Act, 1957 (in short, "the Act"), in respect of their shares in the house property of the association of persons of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... terest of the assessees in the association of persons after allowing exemption under section 5(1)(iv) of the Act at the stage of determination of net wealth before its allocation amongst the members (sic). By a common order dated August 31, 1988, in the appeals for the years 1981-82 and 1983-84 in respect of the aforesaid two assessees, the Tribunal took the view that the matter should go back to the file of the Wealth-tax Officer for fresh disposal after bringing all the basic materials on record and to dispose of the same in the light of the Pune (Special Bench) of the Tribunal in the case of N. R. Karia [1985] 13 ITD 545. A copy of the said decision of the Pune (Special Bench) of the Tribunal (see [1985] 13 ITD 545) has also been annex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he case of CWT v. Tarachand Agarwalla [1989] 180 ITR 234 ; [1989] 2 GLR 129 has not agreed with the said decision of the Madras High Court. In the said case, however, the Division Bench of this court dealt with a case of deduction to be allowed under section 5(1)(iv) of the Act in respect of a house property belonging to a partnership firm and not in respect of a house property belonging to an association of persons. Since the present reference is in respect of a house property comprised in the assets of an association of persons, we proceed to answer the reference by making a fresh analysis of the provisions of the Act and the Rules. The opening words of sub-section (1) of section 5 of the Act make it clear that in respect of the assets ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cording to section 4(1)(b) of the Act, where an individual is a member of an association of persons, the value of his interest in the association of persons is to be determined in the manner prescribed in rule 2 of the Rules and included in computing the net wealth of the individual as belonging to that individual. Rule 2 prescribes that for determining the value of the interest of a member of an association of persons, the "net wealth" of the association of persons on the valuation date shall first be determined. The expression "net wealth" has not been defined in the Rules but in rule 1A(m) it has been stated that words and expressions used but not defined in the Rules and defined in the Act, shall have the meanings respectfully assigned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... members, exemption is to be granted to each such member of the association of persons in his hands under sub-section (1) of section 5 of the Act in respect of the said house or part of the house up to the extent admissible under the proviso to clause (iv) of the said sub-section. Mr. Talukdar took us through the decisions of the Madras High Court (see [1976] 104 ITR 608) to show that in that decision the property belonging to the firm was held as not belonging to the partners of the firm so as to entitle the partners to claim the exemption under section 5(1)(iv) of the Act. But we have no hesitation to hold that an association of persons, unlike a company, his no legal personality of its own and the property that belongs to the association ..... X X X X Extracts X X X X X X X X Extracts X X X X
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