9911796707
TMI Blog1985 (6) TMI 42X X X X Extracts X X X X X X X X Extracts X X X X ..... as such the building appeared in the balance-sheet of M/s New Light Tannery and standing in the name of Tannery in municipal records, as such the partners were not entitled for the claim under s. 5(1)(iv) of the WT Act. The assessee claimed exemption under s. 5(1)(iv) in respect of the tannery building. The ITO observed that the immovable property is the asset of the firm and is not owned by the assessee. As such he negatived the claim of the assessee under s. 5(1)(iv) of the WT Act and computed the wealth as under: Asst. yr.: 1977-78, Shri Suheb Ahsan Capital in M/s New Light Tannery . Rs. 60,174 Accretion in Factory building . Rs. 65,896 Accretion in Machinery/Boilder . R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs. 8,184 . . Rs. 1,35,137 Less : W.T. liability . Rs. 627 . . Rs. 1,34,465 On appeal before the AAC it was contended on behalf of the appellants that even if the tannery building is owned by the firm the exemption under s. 5(1)(iv) should be allowed to the partners in view of the authority reported in CIT vs. Brij Mohan Das (1979) 9 CTR (All) 50 : (1979) 118 ITR 397 (All) and CWT vs. Nandlal Jalan (1980) 14 CTR (Pat) 181 : (1980) 122 ITR 781 (Pat). The building also includes residential portion of five partners and provisions are directly applicable. The AAC on consideration of facts observed as under: "I have considered the facts and I agree with the appellant that in vie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... resentative for the assessee contended before us that the firm is not a legal entity been though it has some attributes of personality. "Firm" is a compendious expression to designate an entity, not a person. What is called property of the firm is the property of the partners and what are called debts and liabilities of the firm are their debts and liabilities. It was also contended that during the subsistence of the partnership, assets thrown into the partnership by the partners get merged together and lose their identity. All the same, the assets as a whole belong to the partners. In computing the net wealth of the firm by reference to r. 2, of WT Rules if a partner qualifies for any exemption provided under the Act, such exemption must b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to consideration in determining the net wealth of the firm. This authority, in our opinion is on all fours in this case. The authorities relied upon by the Revenue are no doubt against the assessee. But in view of the ratio in the case of R. Gopal Ramnarayan vs. Third ITO (1980) 126 ITR 360 (Kar), we are inclined to follow the decision of their Lordships of Patna High Court in the case of Nandlal Jalan. Respectfully following the said decision of their Lordships of Patna High Court, we hold that the AAC was perfectly justified in holding that the assessee is entitled for deduction under s. 5(1)(iv) of the WT Act on the property held by the firm for tannery and residential purposes. He rightly directed the WTO to allow the relief as per law. ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
