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TMI Blog1984 (4) TMI 7X X X X Extracts X X X X X X X X Extracts X X X X ..... o. XXVII of 1957) (which will for the sake of brevity hereinafter be referred to as "the Act"), in respect of the immovable property. The Wealth-tax Officer, by his order dated February 20, 1976, was of the opinion that the ownership of property has been shifted from individual to Hindu undivided family as soon as the property is thrown in the common hotchpotch and that individual and the Hindu undivided family are two different persons (entities) and, therefore, the ownership has changed hands. According to the Wealth-tax Officer, the property cannot be said to be owned by the assessee and, therefore, the claim for exemption under section 5(1)(iv) of the Act was not allowed. He, therefore, determined the value of the immovable property under section 4(1A) of the Act. On appeal, the Appellate Assistant Commissioner by his order dated June 3, 1976, allowed the appeal and in view of the finding of the Tribunal for the immediately preceding year, namely, 1974-75, directed the Wealth-tax Officer to allow exemption to the assessee in terms of section 5(1)(iv) of the Act. A further appeal was taken by the Revenue. The Tribunal by its order dated May 13, 1977, held that the assessee is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uation date of every individual, Hindu undivided family and company at the rate or rates specified in the Schedule." Section 4 deals with net wealth to include certain assets. Section 4(lA) of the Act runs as follows : "4. Net wealth to include certain assets.-... (lA) Where, in the case of an individual being a member of a Hindu undivided family, any property having been the separate property of the individual has, at any time after the 31st day of December, 1969, been converted by the individual into property belonging to the family through the act of impressing such separate property with the character of property belonging to the family or throwing it into the common stock of the family or been transferred by the individual, directly or indirectly to the family otherwise than for adequate consideration (the property so converted or transferred being hereinafter referred to as the converted property), then, notwithstanding anything contained in any other provision of this Act or in any other law for the time being in force, for the purpose of computing the net wealth of the individual under this Act for any assessment year commencing on or after the 1st day of April, 1972, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... u undivided family. The question relating to exemption under section 5(1)(iv) along with the provisions of section 4 of the Act was examined by some of the High Courts. The earliest case is S. Naganathan v. CWT [1975] 101 ITR 287 (Mad). Before the Division Bench of the Madras High Court in S. Naganathan's case the question was with respect to section 4(1)(a) of the Act Ramaswami J., speaking for the court, observed as under (at p.. 290) : "There is nothing either in section 4 or in section 5(1), in our view, which shows an intention of Parliament either to limit the fiction created under section 4(1) only for the purpose of including the value of the asset transferred in the net wealth of the transferor or exclude the application of section 5(1)(iv) to a case where the transfer related to a house belonging to the assessee." Another Division Bench of the same High Court followed S Naganathan's case [1975] 101 ITR 287 in V Vaidyasubramaniam v. CWT [1977] 108 ITR 538. Sections 4(1)(a) and 5(1)(iv) were considered and the learned judges followed the view taken in S. Naganathan's case and held that the benefit of section 5(1)(iv) of the Act would also be available to a case fallin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4 provides for the inclusion of certain assets which in normal circumstances may not have been included and section 5 makes a provision for the exclusion of certain assets which keeping the law in view would have been treated as assets in the hands of the assessee for computation of his net wealth. Exemptions under section 5 have been provided to give effect to the intention of Parliament as a matter of public policy. " (Emphasis added). No authority was cited by the learned counsel for the Revenue in which contrary view has been taken. The aforesaid authorities are nearer home for considering the provisions of section 4(1A) and section 5(1)(iv) of the Act. The reasons given in connection with section 4(1)(a) are equally applicable while examining section 4(1A) of the Act. The expression "belonging to the family" used in section 4(1A) seems to us to have been included for the purpose of uniformity of expression which we find in other provisions like section 2(m) and section 5(1)(iv) and not for any other specific purpose. For the purpose of considering section 4(1A) and section 5(1)(iv), we may adopt what has been stated by the learned judges of the Madras High Court in S Nag ..... X X X X Extracts X X X X X X X X Extracts X X X X
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