Let-out residential property exemption under wealth tax depends on lease evidence, not TDS date, and may still cover commercial use

A residential property let out for more than three hundred days in the relevant previous year remained eligible for exemption under section 2(ea)(i)(4) of the Wealth Tax Act, 1957, because the lease deed established the letting date and the TDS certificate date was not determinative. The property did not lose its residential character merely because the tenant used it for commercial purposes, and on those facts the alternative exemption under section 2(ea)(i)(5) was also available. The analysis treats the lease terms and actual letting arrangement as controlling for exemption eligibility under the wealth tax provisions.

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Issues: Whether a residential property let out for more than three hundred days in a previous year remained eligible for exemption under section 2(ea)(i)(4) of the Wealth Tax Act, 1957, and whether, if the property was treated as having been let out for commercial purposes, exemption under section 2(ea)(i)(5) was also available.

Analysis: The lease deed showed that the property was let out from 1-6-2002, which satisfied the requirement of being let out for more than three hundred days in the relevant previous year. The date reflected in the TDS certificate was only the date of payment or credit and was not the decisive factor for determining the date of letting out. The residential character of the property was not lost merely because the tenant used it for commercial purposes, and on the facts the property also fell within the alternative exemption provision relating to such use.

Conclusion: The assessee was entitled to exemption under section 2(ea)(i)(4) of the Wealth Tax Act, 1957, and also under section 2(ea)(i)(5) of the Wealth Tax Act, 1957.

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