WEALTH TAX OFFICER Vs. MEHR TOOS VAKIL
LAWS(IT)-1989-8-2
INCOME TAX APPELLATE TRIBUNAL
Decided on August 01,1989

Appellant
VERSUS
Respondents

JUDGEMENT

M.A.A. Khan, Judicial Member - (1.)IN this appeal by revenue from the order of the A.A.C., A.R.I, Ahmedabad dated 10th December, 1987, the short but interesting question that arises for our consideration is whether the assessee, an individual, is entitled to exemption Under Section 5(1)(iv), 5(1)(xxiii) and Under Section 5(1)(xxvi) of the W.T. Act, 1957 (the Act) in respect of her remainderman's interest in the immovable properties, shares and bank deposits respectively settled on trust by late Sir R.J. Vakil.
(2.)Late Sir R.J. Vakil settled on trust his movable and immovable properties for the benefit of his son Shri Toos R. Vakil and his son's two daughters,' viz. Mehr Toos Vakil,' the present assessee and Tehnas R. Vakil. The father, Shri Toos R. Vakil was given life interest and the daughters were given equal remainderman's interest in the properties settled on trust. At the assessment proceedings for the year under consideration for which the valuation date was 31-3-1979, the assessee claimed exemption Under Section 5(1)(iv), 5(1)(xxiii) and Under Section 5(1)(xxvi) r.w.s. 5(1A) of the Act in respect of her half share, as remainderman, in the house property, shares and bank deposits respectively. She had valued her remainderman's interest in the said properties as per actuarial report which was not accepted by the W.T.O. and he estimated the value thereof at different figure. But the valuation of the properties does not make subject matter of appeal before us. Any way, the W.T.O. did not give any exemption to the assessee Under Section 5(1) of the Act in respect of the house property as well as the shares and bank deposits on the ground that the assessee was not owner of such assets. He, however, included the value of her remainderman's interest in the said properties in the computation of her net wealth and finalised the assessment Under Section 16(3) of the W.T. Act. The assessee appealed to the A.A.C.
In appeal, the learned A.A.C. took note of the fact that in the case of Shri Toos R. Vakil, the father of the assessee, the Tribunal has accepted his claim for exemption Under Section 5(1)(iv) in respect of his life interest in the house property. The learned A.A.C. further noted that for the A.Y. 1981-82, the W.T.O. had accepted assessee's statement of value of her remainderman's interest in the various assets and had also accepted her claim for deduction as well. He, therefore, directed the W.T.O. to allow deduction Under Section 5(1)(iv) to the assessee in respect of her remainderman's interest in the house property. Taking a clue for the support of his view from the order of the Tribunal, granting exemption Under Section 5(1)(iv) in the case of the father of the assessee in respect of his life interest in the house property, the learned A.A.C. observed that there was no reason why assessee's remainderman's interest in the shares and bank deposits should not be considered eligible for exemption to the extent provided Under Section 5(1)(xxiii) and Under Section 5(1)(xxvi). He accordingly accepted the assessee's claim in that behalf and directed the W.T.O. accordingly.

(3.)MR. P.K. Sharma, the learned Departmental Representative, has vehemently urged before us that the approach of the learned A.A.C. on the points involved in the present case was not at all justifiable in the facts and circumstances of this case. MR. Sharma emphasised that the nature of the asset belonging to the assessee in the form of her remainderman's interest in the house property cannot be equated to 'one house or part of a house belonging to assessee' as mentioned in Section 5(1)(iv) of the Act. MR. Sharma stressed that exemption Under Section 5(1)(iv) in respect to the house property wherein assessee's father was having life interest, cannot be allowed to the assessee who was simply having remainderman's interest therein which was very much in the nature of movable property.


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