Co-sharer exemption under wealth tax confirmed for fractional ownership in jointly held house property

A co-sharer holding a fractional interest in jointly owned immovable property is entitled to exemption for a house property or part of a house under section 5(1)(iv) of the Wealth-tax Act, 1957. The text notes that the assessee's 1/5th share was claimed as exempt and that several High Courts had accepted this position. The issue was treated as settled by the Supreme Court in favour of co-owners and co-sharers, confirming that the exemption extends to such fractional ownership. On that basis, the assessee's claim was allowed and the question was answered in the affirmative against the Commissioner.

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Issues: Whether a co-sharer holding a fractional share in an immovable property owned jointly or through an association of persons is entitled to exemption under section 5(1)(iv) of the Wealth-tax Act, 1957.

Analysis: The question turned on the scope of the exemption for a house property or part of a house belonging to the assessee under section 5(1)(iv) of the Wealth-tax Act, 1957. The assessee's 1/5th share in the immovable property was claimed as exempt, and the view that a co-sharer could claim the benefit had been accepted by several High Courts. The controversy was treated as settled by the Supreme Court by upholding the view that the exemption is available to a co-owner or co-sharer in such property.

Conclusion: The assessee was entitled to the exemption under section 5(1)(iv) of the Wealth-tax Act, 1957, and the question was answered in the affirmative in favour of the assessee and against the Commissioner.

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