VIJAY KUMAR GOYAL Vs. WEALTH TAX OFFICER
INCOME TAX APPELLATE TRIBUNAL
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Ram Rattan, Accountant Member -
(1.) THESE three appeals by the assessee involving common contentions are, therefore, disposed of by a common order. The assessment years involved are 1977-78 to 1979-80. The facts briefly stated are that the assessee returned the value of an immovable property held by the assessee at Rs. 71,900, for the assessment year 1977-78 and at Rs. 72,000 each for the assessment years 1978-79 and 1979-80. The assessee, however, failed to claim exemption under Section 5(1)0'v) of the Wealth-tax Act, 1957 ("the Act"), which grants exemption to one house or a part of the house belonging to the assessee, subject to maximum value of Rs. 1 lakh. The WTO made the assessment accordingly. Subsequently, the assessee moved an application under Section 35 of the Act stating that non-allowance of deduction of one residential house up to the value of Rs. 1 lakh by the WTO was a mistake apparent from record and, therefore, the same should be rectified and necessary deductions allowed. The WTO rejected the claim of the assessee on the ground that the exemption is in respect of residential house only. He, however, did not specify in the order whether the house in question was residential or not.
He, therefore, rejected the claim of the assessee for all the three assessment years. On appeal the AAC held that the applications under Section 35 were rightly rejected by the WTO though on erroneous grounds. According to the AAC the exemption under Section 5(1)(iv) was allowable in respect of residential house as well as business premises, but the point for consideration was whether the assessee had claimed any exemption. According to him, no exemption was claimed in the returns of net wealth nor at the time of making the assessment. He, therefore, rejected the appeals by the assessee. The assessee is aggrieved and is in second appeal before the Appellate Tribunal. The learned counsel of the assessee contended that it was a statutory deduction and, therefore, the ITO should have allowed the same suo moto. In this connection he pointed out that earlier exemption in respect of residential house was admissible if it was self-occupied by the assessee. With effect from 1-4-1972, this clause was amended so as to give exemption for one residential house up to the value of Rs. 1 lakh, irrespective of the fact whether it was a residential house or a commercial house. He also referred to the circular of the CBDT dated 29-7-1973 wherein the CBDT had clarified that exemption under Section 5(1)(iv) was available in respect of residential houses from the assessment year 1972-73, irrespective of the fact whether the building was for residence or for a commercial use. The learned counsel of the assessee also referred to another circular of the Board wherein it had emphasized upon all assessing authorities that where relief is due to an assessee under the statute, it should be brought home to the assessee, even if it was not claimed, and necessary relief should be allowed. He, therefore, urged that this being a statutory deduction, the ITO himself should have allowed the same either at the time of original assessment or subsequently under Section 35 as it was a legal mistake apparent from record. He further submitted that no investigation of facts were involved in this case, as the assessee had claimed exemption in respect of one house property, which was below Rs. 1 lakh. The WTO had accepted that value and, therefore, the entire value of the property should have been exempted and orders rectified under Section 35. The learned departmental representative, on the other hand, supported the orders of the AAC.
(2.) We have given a careful consideration to the rival submission. It is a common ground between the parties that deduction under Section 5(1)(iv) is admissible in respect of a house, whether used for self residence or for commercial purpose. The deduction under Section 5(1)(iv) is also statutory inasmuch as this section lays down that wealth-tax shall not be payable by an assessee in respect of one house or part of a house belonging to the assessee. This, in our opinion, is a mistake of law apparent from record and should have been rectified by the WTO. Under the circumstances, we are unable to sustain the orders of the authorities below. The WTO is directed to rectify the orders under Section 35 and allow necessary relief.
In the result all the three appeals are allowed.;
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