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TMI Blog1984 (4) TMI 81X X X X Extracts X X X X X X X X Extracts X X X X ..... g in the credit of the firm on the ground that the partnership is one at will and the property acquired has not exceeded for more than six years. The WTO did not accept this submission. He included in the net wealth the value of her share in the firm. On appeal, the AAC upheld the same. 2. The learned counsel for the assessee strongly urged that the firm has commenced on 28-3-1980. The partnership being one at will can be terminated at any time. Hence, the property acquired was not for more than six years as the duration of the partnership being one at will. Thus, the assessee is entitled for exemption under section 2(e)(1)(v) of the Wealth-tax Act, 1957 ('the Act'). The learned departmental representative submitted that the interest in p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - (b) where the assessee is a partner in a firm or a member of an association of persons (not being a co-operative housing society), the value of his interest in the firm or association determined in the prescribed manner. " Rule 2 of the Wealth-tax Rules, 1957, deals with valuation of interest of a partner in partnership. It is clear from the above provision that if an assessee is a partner in a firm, the value of his interest in the firm is includible in his/her net wealth. The value of it is determined as per rule 2. In view of the above provision the value of the assessee's interest in the partnership is clearly includible in her net wealth. We are unable to agree with the contention that once the partnership is one at will, the int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... neral law. The provision in clause (v) is a special provision made for the purposes of wealth-tax, and, therefore, when that provision refers to the interest being available for a period not exceeding six years, in our view, that clause will be applicable only where it is possible to be positively established on record on such material as is available, that the assessee is not entitled to enjoy the beneficial interest for a period exceeding six years. On the mere possibility of the assessee not being alive beyond six years from the vesting date provided in the trust deeds, his case will not fall within clause (v) of section 2(e)(1). This contention must, therefore, be rejected. . ." It was held therein that the said item will be applicabl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he deeming provision contained in section 4(1)(b), properly understood, must be held to be referable to the quantification of his interest in the firm determined in the prescribed manner that is made includible in his net wealth. Section 3 of the Act read with the definitions of 'net wealth' as given in section 2(m) and 'assets' given in section 2(e) clearly brings out the exigibility of a partner's interest in a firm either in his individual capacity or in his capacity as the karta of an HUF to wealth-tax under the Act. ." Again, it was observed as under : " On reading the aforesaid provisions together, it will appear clear that wealth-tax has been levied on the net wealth of an individual or an HUF, meaning thereby the aggregate val ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ime and upon the dissolution of the firm to a share in the assets of the firm which remain after satisfying the liabilities. Thus, it is clear from the above decision that the partnership property will vest in all the partners. 6. In Malabar Fisheries Co. v. CIT [1979] 120 ITR 49 the Supreme Court held that it is the partners who own jointly or in common the assets of the partnership. When one talks of the firm's property or firm's assets, all that is meant is property or assets in which all partners have a joint or common interest. In CWT v. Mrs. Christine Cardoza [1978] 114 ITR 532 (Kar.) the assessee and four others owned an estate in partnership. The claim of the assessee was that deduction of Rs. 1,50,000 under section 5(1)(iva) of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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