V. DONGZATHANG, VICE-PRESIDENT : - (1.) SRI Shaileshchandra D. Shah is a partner in a firm which owns an immovable property in the firm of Milan Talkies, Ahmedabad. Similarly, Shaileshchandra Family Trust and Girishchandra Dahyabhai Family Trust are partners in a firm which owns a Relief Cinema, Ahmedabad. Each of these partners claimed relief under s. 5(1)(iv) of the WT Act in respect of their share in the value of the immovable property for the asst. yr. 1975-76. The Assessing Officer passed identical orders in each of the case and rejected the claim for identical reasons observing as follows : "It is seen that the assessee has claimed the exemption of Rs. 1,00,000 under s. 5(1)(iv) of the WT Act in respect of its share in the value of immovable property owned by M/s. Milan Talkies, Ahmedabad in which he is a partner. Since the exemption under s. 5(1)(iv) of the WT Act is available only to the assessee in respect of the house or part of the house belonging to him while in this case the property belongs to the firm in which he is simply a partner, hence, the claim of the assessee for the said exemption under s. 5(1)(iv) of the WT Act is not accepted."
(2.) Aggrieved by the said order, the assessee took up the matter in appeal before the AAC, who allowed the claim on the basis of the decision of the Special Bench of the Tribunal, Madras Bench, in the case of L. Gulabchand Jhabakh vs. WTO (1982) 14 TTJ (Mad)(SB) 465 : (1982) 1 SOT 613 (Mad)(SB), which in turn followed the decision of the Hon'ble Madras High Court in the case of CWT vs. K. Saraswathi Ammal & Ors. (1981) 127 ITR 404 (Mad). The Revenue came upon appeal before the Tribunal challenging the order contending that the AAC erred in allowing exemption of Rs. 1,00,000 in terms of s. 5(1)(iv) of the WT Act. The case came up before the Division Bench of the Tribunal, Ahmedabad Bench. The Bench considered it fit to refer the following question to the Special Bench. "Whether immovable property owned by the firm answers the description of a house or part of a house belonging to the assessee for the purpose of s. 5(1)(iv) of the WT Act ?"
(3.) IT is in this manner that the case has come up before us. At the outset, it will be worthwhile to note that this issue is no more res integra in so far as the Tribunal is concerned. This controversy arose for the first time before the Tribunal, Madras Bench in the case of L. Gulabchand Jhabakh vs. WTO (supra). The Special Bench there considered the conflicting decision of the Hon'ble Madras High Court in the case of Purushothamdas Gocooldas vs. CWT 1976 CTR (Mad) 361 : (1976) 104 ITR 608 (Mad) and subsequent decision in CWT vs. K. Saraswathi Ammal (supra). After considerable deliberation on the issue, the Special Bench preferred to follow the later decision in CWT vs. Saraswathi Amal (supra) observing as follow : "We are inclined to accept this submission of the assessee. After all, the real controversy in these cases is about the meaning and effect of the Supreme Court judgment in the case of Addanki Narayanappa vs. Bhaskara Krishnappa (supra). When the Madras High Court has in a subsequent case interpreted that in a way different from that contained in the case of Purushothamdas Gocooldas vs. CWT (supra) (though without expressly referring to it), we can follow that interpretation in the latest judgment, particularly when three other High Courts have also understood the Supreme Court judgment in the same manner as was done in the subsequent unreported decision of the Madras High Court." In doing so, the Special Bench took considerable support from the following decisions in favour of the view taken by it : CWT vs. Mrs. Christine Cardoza (1978) 114 ITR 532 (Kar); CWT vs. I. Butchi Krishna 1977 CTR (Ori) 299 : (1979) 119 ITR 8 (Ori); CWT vs. Nandlal Jalan (1980) 14 CTR (Pat) 181 : (1980) 122 ITR 781 (Pat). IT was further noted by the Special Bench that the interpretation given by the Hon'ble High Court of Madras in Ammal's case (supra) is in conformity with the subsequent decisions of the Hon'ble Supreme Court in the case of CIT vs. R. M. Chidambaram 1977 CTR (SC) 71 : (1977) 106 ITR 292 (SC) and in the case of Malabar Fisheries Co. vs. CIT (1979) 12 CTR (SC) 415 : (1979) 120 ITR 49 (SC).;