Residential-use valuation under Wealth-tax law may apply even without physical occupation, if the house is kept ready for residence.

Section 7(4) of the Wealth-tax Act, 1957 is explained as applying pragmatically to a house property kept for the assessee's residential use, even if the assessee was not physically occupying it during the relevant period. Physical occupation is not treated as a necessary condition where the house was maintained for residence, was not let out, and was not used to earn income or profit. On that basis, the lower valuation under section 7(4) is available when the statutory requirement of exclusive residential use is satisfied in substance.

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Issues: Whether the assessee was entitled to the benefit of section 7(4) of the Wealth-tax Act, 1957 for valuation of the house property despite not being physically in occupation of it during the relevant year.

Analysis: The expression "exclusively used by him for residential purposes throughout the period of 12 months immediately preceding the valuation date" was construed pragmatically. Physical occupation by the assessee was held not to be a necessary condition. It was sufficient that the house was maintained for residence, was not let out, and was kept ready for the assessee's residential use, without being used to earn income or profit.

Conclusion: The conditions of section 7(4) were satisfied and the assessee was entitled to adopt the lower valuation.

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