COMMISSIONER OF WEALTH TAX LUDHIANA vs. RAJ BALA

WTR/3946/1988HC Punjab & HaryanaPHHC01020071198824 October 2006Author: MR. JUSTICE ADARSH KUMAR GOEL,MR. JUSTICE RAJESH BINDAL2 pages
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What did the High Court hold?

The High Court held that the assessee was entitled to the deduction under Section 5(1)(iv) of the Wealth-tax Act, 1957, in respect of their share in the land and building owned by the firm, M/S Gurmukh Singh & Sons, Ludhiana. The Court's reasoning was based on its decision in an identical case, W.T.R. Nos.32 to 37 of 1988 (Commissioner of Wealth Tax (Central), Ludhiana Vs. Shri Kirpal Singh, Ludhiana), which was decided on the same day. In that prior decision, the Court had ruled against the Revenue and in favour of the assessee on the same question of law. Therefore, following that precedent, the present reference was also answered against the Revenue and in favour of the assessee. The operative direction was to answer the referred question in favour of the assessee.

What were the facts?

These are eight consolidated Wealth Tax Reference Applications (W.T.R. Nos.39 to 46 of 1988) filed by the Commissioner of Wealth-tax (Central), Ludhiana against orders of the Income Tax Appellate Tribunal (ITAT), Chandigarh. The assessment years involved are 1973-74 and 1974-75. The ITAT's orders, dated 2.3.1987, were passed in Wealth Tax Appeal Nos. 37, 38, 33 to 36, 41, and 42 of 1986. The core of the dispute concerns the assessee's entitlement to a deduction under Section 5(1)(iv) of the Wealth-tax Act, 1957, in relation to their share in land and buildings owned by a firm named M/S Gurmukh Singh & Sons, Ludhiana, in which the assessee is a partner.

What were the issues?

1. Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the assessee was entitled to deduction under Section 5(1)(iv) of the Wealth-tax Act, 1957, in respect of his share in the land and building owned by the firm, styled M/S Gurmukh Singh & sons, Ludhiana, in which he is a partner? Assessee's Contention: The judgment does not record any specific contentions made by the assessee. The decision appears to be based on a prior, identical ruling. Revenue's Contention: The Revenue, through its counsel Mr. S.K. Garg Narwana, has challenged the ITAT's decision. The Revenue's argument is implicitly that the assessee is not entitled to the deduction claimed under Section 5(1)(iv) for their share in the firm's property. The Revenue relies on the fact that the ITAT's order was against them.

Which sections of the Income-tax Act were involved?

5(1)(iv)

AI-generated summary — verify with the full judgment below

-1- IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH Date of decision:24.10.2006 The Commissioner of Wealth-tax (Central), Ludhiana ...Petitioner Versus Smt.Raj Bala, Ludhiana ...Respondent **** The Commissioner of Wealth-tax (Central), Ludhiana ...Petitioner Versus Shri Madan Singh, Ludhiana ...Respondent **** The Commissioner of Wealth-tax (Central), Ludhiana ...Petitioner Versus Shri Gurmukh Singh, Ludhiana ...Respondent **** The Commissioner of Wealth-tax (Central), Ludhiana ...Petitioner Versus Shri Bhagat Singh, Ludhiana ...Respondent **** CORAM: HON'BLE MR.JUSTICE ADARSH KUMAR GOEL HON'BLE MR.JUSTICE RAJESH BINDAL Present: Mr.S.K.Garg Narwana, Advocate for the Revenue. **** -2- JUDGMENT Following question of law has been referred for opinion of this Court by the Income Tax Appellate Tribunal, Chandigarh arising out of its order dated 2.3.1987 passed in W.T.A.Nos. 37,38, 33 to 36, 41 and 42 of 1986 respectively, in respect of the assessment years 1973-74 and 1974-75. “Whether on the facts and in the circumst

The order continues below.

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