COMMISSIONER OF WEALTH TAX vs. SHRENIK KASTURBHAI HUF

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WTR/120/1995HC GujaratGJHC24022802199508 November 2001Author: HONOURABLE MR. JUSTICE MOHIT S. SHAH,HONOURABLE MR. JUSTICE D.A.MEHTA2 pages
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What did the High Court hold?

The High Court of Gujarat, in its oral judgment, answered the referred question in the affirmative, in favour of the assessee and against the revenue. The Court's decision was based on its prior ruling dated October 18, 1995, in Wealth-tax Reference No. 34 of 1992. In that earlier case, which involved an identical question for assessment year 1982-83 and the same assessee, the High Court had held that the question was required to be answered in favour of the assessee. Therefore, following this precedent, the present reference was disposed of with the same outcome. The ratio decidendi is that the Tribunal's interpretation of Section 7(4) of the Wealth-tax Act, 1957, regarding residential property occupied by servants, as being applicable, was upheld by the High Court.

What were the facts?

The Commissioner of Wealth Tax (Revenue) has filed a reference application before the High Court of Gujarat at Ahmedabad, seeking an opinion on a question of law referred by the Income-tax Appellate Tribunal (Tribunal). The reference pertains to assessment years 1984-85 and 1985-86 concerning the assessee, Shrenik Kasuribhai HUF. The core issue revolves around the applicability of Section 7(4) of the Wealth-tax Act, 1957, to residential property occupied by the assessee's servants. The High Court noted that an identical question for assessment year 1982-83 in the case of the same assessee was previously decided by the Court.

What were the issues?

1. Whether, on the facts and in the circumstances of the case, the Appellate Tribunal is right in law in holding that the provisions of Section 7(4) of the Wealth-tax Act, 1957, apply to the residential property occupied by the servants of the assessee? Assessee's Contention: The judgment does not record specific arguments made by the assessee. However, by implication, the assessee would have supported the Tribunal's decision. Revenue's Contention: The revenue, through its counsel Mr. BB Naik, sought to challenge the Tribunal's ruling that Section 7(4) of the Wealth-tax Act, 1957, applies to residential property occupied by the assessee's servants. The revenue's stance is that this provision should not be applied in such circumstances.

Which sections of the Income-tax Act were involved?

Section 27(1),Section 7(4)

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

WEALTH TAX REFERENCE No 120 of 1995

For Approval and Signature:

Hon'ble MR.JUSTICE M.S.SHAH and Hon'ble MR.JUSTICE D.A.MEHTA

============================================================ 1. Whether Reporters of Local Papers may be allowed : NO to see the judgements?

2.

To be referred to the Reporter or not? : NO 3. Whether Their Lordships wish to see the fair copy : NO of the judgement?

4.

Whether this case involves a substantial question : NO of law as to the interpretation of the Constitution of India, 1950 of any Order made thereunder?

5.

Whether it is to be circulated to the Civil Judge? : NO -------------------------------------------------------------- COMMISSIONER OF WEALTH TAX Versus SHRENIK KASTURBHAI HUF -------------------------------------------------------------- Appearance: 1. WEALTH TAX REFERENCE No. 120 of 1995 MR BB NAIK with MR MANISH R BHATT for Petitioner MR MANISH J SHAH for Respondent No. 1

--------------------------------------------------------------

CORAM : MR.JUSTICE M.S.SHAH and MR.JUSTICE D.A.MEHTA

Date of decision: 08/11/2001

ORAL JUDGEMENT (Per : MR.JUSTICE M.S.SHAH)

In this reference at the instance of the revenue, the Income-tax Appellate Tribunal, Ahmedabad has referred the following question under Section 27(1) of the Wealth-tax Act, 1957 for our opinion in respect of assessment years 1984-85 and 1985-86 :-

Whether, on the facts and in the circumstances of the case, the Appellate Tribunal is right in law in holding that the provisions of sec. 7(4) apply to the residential property occupied by the servants of the assessee ?"

2.

We have heard Mr BB Naik, learned counsel for the revenue and Mr Manish J Shah, learned counsel for the respondent-assessee.

3.

Our attention is invited to the decision dated 18.10.1995 of this Court in Wealth-tax Reference No. 34 of 1992 wherein an identical question was referred in the case of this very assessee for assessment year 1982-83. After hearing the learned counsel for the parties at length in that reference, this Court held that the questions was required to be answered in favour of the assessee and against the revenue.

4.

Following the aforesaid decision, our answer to the question is in the affirmative i.e. in favour of the assessee and against the revenue.

5.

The reference accordingly stands disposed of with no order as to costs.

(M.S. Shah, J.)

(D.A. Mehta, J.) sundar/-

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