1989 (5) TMI 40

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....section 2(m), section 4(1)(b), section 5(1)(iv) of the Wealth-tax Act, 1957, and rule 2 of the Wealth-tax Rules, 1957, the Tribunal was justified in upholding the direction of the Appellate Assistant Commissioner that exemption of proportionate share of the interest in the building belonging to the firm should be allowed under section 5(1)(iv) in the hands of the assessee-partner ?" (underlining ours) The facts of the case, in brief, are thus. The assessee was a partner in a partnership firm. In computing the net wealth of the assessee, the Wealth-tax Officer included the value of the assessee's interest in the firm of which he was a partner under rule 2 of the Wealth-tax Rules, 1957. The firm owned certain immovable properties. However,....

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....ed in section 2 (m) to mean the aggregate value computed in accordance with the provisions of the Wealth-tax Act of all the assets, wherever located, belonging to the assessee on the valuation date. Under section 4(1)(b) of the Wealth-tax Act, it is provided that, where the individual assessee is a partner in a firm, it is the value of his interest in the firm determined in the prescribed manner, which is to be treated as belonging to him and is to be included in computing his net wealth. "Prescribed manner" means prescribed by the Rules made under the Wealth-tax Act, viz., Wealth-tax Rules, 1957. Rule 2 provides the manner of determination of the value of the interest of a person in a firm of which he is a partner. In Addanki Narayanapp....

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....ets of the firm belongs to the individual partner and is chargeable to wealth-tax and the partner will be entitled to exemption under section 5 (1 ) (iv) in the computation of such wealth. The next question which arises for consideration is the method of deduction in the computation of the wealth of the firm. As earlier stated, the Wealth-tax Act has not made a partnership firm an assessee. Therefore, the deduction contemplated is in the computation of the net wealth of the assessee and not that of the firm which is not an assessee. In such situation, the deduction has to be given in the hands of the assessee. In C WT v. Mrs. Christine Cardoza [1978] 114 ITR 532, the Karnataka High Court held that in computing the net wealth of an assess....