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TMI Blog1991 (8) TMI 54X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessment years 1972-73 and 1973-74, and in Wealth-tax Reference No. 22 of 1985, the reference relates to the assessment year 1974-75. In Wealth-tax Reference No. 20 of 1985, the assessee was a partner of the firm, M/s. Tinsukia Pharmacy, Tinsukia. The firm had a fixed deposit of Rs. 74,405 and the assessee claimed that his share in the said deposit was Rs. 24,801. While determining the value of interest in the firm, the assessee had deducted the above sum of Rs. 24,801 out of the value of interest in the firm calculated by him. The assessee claimed that he is entitled for deduction under section 5(1)(xxvi) of the Wealth-tax Act, 1957, in short "the Act". Section 5(1) of the Act contemplates exemption in respect of an assessee and further ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... question in the hands of the assessee ?" Of course, in Wealth-tax Reference No. 20 of 1985 in the first question, the last word used is "business", in fact; it should be "assessee". It may also be stated that in Wealth-tax Reference No. 22 of 1985, the question was differently worded, but the legal question involved is the same. We may, however, quote the said question : "Whether, on the facts and in the circumstances of the case and on a proper construction of section 2(m), section 4(1)(b), section 5(1)(iv) of the Wealth-tax Act, 1957, and rule 2 of the Wealth-tax Rules, 1957, the Tribunal was justified in upholding the direction of the Appellate Assistant Commissioner that exemption of proportionate share of the interest in the buildi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le property should be treated as movable property for the purpose of section 5(1)(iv) of the Act. This court considered section 2(m) and section 3 of the Act along with section 4(1)(b) of the Act. The decisions of the apex court in Addanki Narayanappa, AIR 1966 SC 1300 and Juggilal Kamlapat Bankers v. WTO [1984] 145 ITR 485 were referred to, wherein the apex court held that, since the firm has no existence, the partnership property will vest in all the partners and, in that sense, every partner has an interest in the property of the partnership ; and further the interest of a partner in the partnership firm belongs to him and would be includible in the "asset" and will have to be taken into account while computing the net wealth of the indi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CWT [1976] 104 ITR 608, for the reasons stated in the judgment, and a part of which has been extracted in the judgment. The Division Bench finally held that the net wealth of the firm should be determined including the value of the building and then it should be allocated amongst the partners indicating the nature of assets and liabilities allotted to the share of the partner and the net wealth of the partner is to be determined by including the share so allotted, and only thereafter, the deduction under section 5(1)(iv) should be allowed, i.e., deduction should be allowed under the above section in the hands of the assessee-partner and not in the hands of the firm. We have extracted the relevant portion of the judgment of the Division ..... X X X X Extracts X X X X X X X X Extracts X X X X
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