COMMISSIONER OF WEALTH TAX (CENTRAL) LUDHIANA vs. KIRPAL SINGH LUDHIANA
What did the High Court hold?
The High Court held that the question referred has already been decided by this Court in the case of Commissioner of Wealth Tax Vs. Vipin Kumar, (1993) 203 ITR-941. In that judgment, it was held that a partner is entitled to 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 in which they are a partner. Therefore, the High Court answered the referred question against the revenue and in favour of the assessee. The operative direction is to answer the question as indicated, implying the ITAT's order is upheld.
What were the facts?
The Revenue, Commissioner of Wealth Tax, Ludhiana, has filed these references against the orders of the Income Tax Appellate Tribunal (ITAT), Chandigarh. The ITAT's order dated 2.3.1987, passed in Wealth Tax Appeal Nos. 29 to 32/Chandi/86, 39 and 40/Chandi/86, pertains to assessment years 1973-74 and 1974-75. The core issue revolves around the assessee's entitlement to a deduction under Section 5(1)(iv) of the Wealth Tax Act, 1957, concerning their share in land and building owned by a firm in which they are a partner. The High Court is considering the question of law referred by the ITAT.
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, M/S Gurmukh Singh & Sons, Ludhiana, in which he is a partner? Assessee's Contention: The judgment does not record specific arguments made by the assessee. However, the reference implies the assessee argued for the deduction. Revenue's Contention: The judgment does not record specific arguments made by the revenue. However, the reference implies the revenue contested the assessee's entitlement to the deduction.
Which sections of the Income-tax Act were involved?
Section 5(1)(iv)
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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. 29 to 32/Chandi/86, 39 and 40/Chandi/86 respectively , in respect of the assessment years 1973-74 and 1974-75.. “Whether on the facts and in the circumstance of the case, the Tribunal was right in law in holding that the assessee was entitled to deduction u/s 5(1) (iv) in respect
W.T.R Nos.32 to 37 of 1988 -2- of his share in the land and
The order continues below.
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