High Court Of Madhya Pradesh
Commissioner Of Wealth Tax vs. Anuradha Nagory
Section WT 7(4)
Asst. Year 1974-75, 1975-76
S.S. Jha & S. Samvatsar, JJ.
Misc. Civil Case No. 22 of 1987
21st November, 2003
Counsel Appeared
R.D. Jain & D.P.S. Bhadoriya, for the Petitioner
ORDER
S. Samvatsar, J. :
This reference application is filed under s. 27(1) of the WT Act at the instance of CWT, Bhopal. CWT has asked the opinion of this Court on following questions of law :
“1. Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that s. 7(4) of the WT Act, 1957 which came on the statute book w.e.f. 1st April, 1976 could be applied in asst. yrs. 1974-75 and 1975-76 ?
2. Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the assessee’s half share in house No. 7/197, Swarup Nagar, Kanpur was exclusively used by her for residential purposes ?” The facts of the case are that the assessee had a half share in the house No. 7/197, Swarup Nagar, Kanpur. Other half share of the house belongs to her husband. Husband and wife lived jointly in the house. The assessee has declared the value of her half share at Rs. 1,11,000, Rs. 1,11,000 and Rs. 1,25,400 in three assessment years respectively. The WTO referred the matter to the Valuation Officer who determined the assessee’s share at Rs. 2,11,000, Rs. 2,14,500 and 2,18,000, respectively for the three years respectively. After the assessment, the assessee preferred an appeal before the appellate authority claiming benefit of s. 7(4) of the WT Act which has come into force w.e.f. 1st April, 1976. The appellate authority rejected the assessee’s claim observing that since the appellant is living with her husband it cannot be said that she is using the property exclusively for her own residence. This order was challenged by the assessee before the Tribunal. Appeal was allowed by the Tribunal holding that s. 7(4) of the WT Act is procedural in nature and has a retrospective operation. The assessee is, therefore, entitled to the benefit of s. 7(4) of the WT Act. Sec. 7(4) of the Act provides that a house includes part of the house and the co-owner is entitled to say that he is using the property exclusively for his residence and in the event the assessee is using the premises exclusively for his residence then the valuation put by the assessee should be accepted. Thus, the Tribunal accepted the contention of the assessee and set aside the assessment order of the appellate Court. Thereafter, the Revenue filed an application for referring the aforesaid two questions of law for the opinion of this Court. As regards the question of retrospective operation of s. 7(4) of the WT Act, the apex Court in the case of CWT vs. Sharvan Kumar Swarup & Sons (1994) 122 CTR (SC) 380 : (1994) 210 ITR 886 (SC) has laid down that the procedural law is applicable to the pending cases and has, therefore, a retrospective effect. In the aforesaid case the apex Court was examining the applicability of ss. 3, 7(1) and 46 of the Act. In view of the said judgment question No. 1 is answered in favour of the assessee and it is held that s. 7(4) of WT Act has a retrospective operation. The said section provides that co-owner of house is entitled to claim that the whole house which is used for residential purpose is exclusively used by him.
In the present case the house is jointly owned by the husband and wife. Hence, it cannot be said that the house is not exclusively used by the assessee for her residential purpose. The fact that her husband has also claimed the said benefit is no ground for rejecting her claim. Thus, question No. 2 is also answered in favour of the assessee.
In the result both the questions are answered in favour of the assessee and against the Revenue. Reference application stands disposed of. Reference answered in favour of assessee.
[Citation : 269 ITR 190]
