Wealth-tax exemption for partnership assets applies in the partner's individual assessment to the extent of her share.

For wealth-tax purposes, the statutory exemption for partnership assets was held to attach to the partner's share and not merely to the firm's deemed net wealth. Applying its earlier view, the Court stated that the benefit under section 5(1A) is available in the partner's individual assessment to the extent of the exempt assets attributable to that share, even though the firm's net wealth is computed first on a deemed basis.

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Issues: Whether deduction under section 5(1A) in respect of assets belonging to a firm is to be allowed only in the hands of the firm while computing its deemed net wealth under rule 2 of the Wealth-tax Rules, or whether the partner can claim the benefit in individual assessment to the extent of her share.

Analysis: The question was governed by the earlier decision of the same Court on exemption available to a partner in respect of partnership assets. The Court applied the principle that exemption attached to the partner's share in the partnership wealth and not merely to the firm's computation of deemed net wealth, and followed the earlier view that the partner is entitled to the benefit of the statutory exemption in her individual assessment.

Conclusion: The deduction under section 5(1A) is allowable in the hands of the partner in individual assessment to the extent of the exempt assets attributable to her share, and not only in the hands of the firm.

Ratio Decidendi: For wealth-tax purposes, the statutory exemption relating to partnership assets is available to the partner in individual assessment to the extent of the partner's share, even though the firm's net wealth is first computed on a deemed basis.

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