COMMISSIONER OF WEALTH TAX VS C.G. RADHAKRISHNAN
1996 P T D 49
[210 I T R 1016]
[Madras High Court (India)]
Before Venkataswami and Rangarajan, JJ
COMMISSIONER OF WEALTH TAX
Versus
C.G. RADHAKRISHNAN
Tax Cases Nos. 823 and 846 of 1981 (References Nos.389 and 390 of 1981, decided on 20/01/1994.
Wealth tax--
---- Business premises---Property in which assessee owned one-third share let out to firm in which assessee was a partner---Additional tax on property not leviable on partner of firm---Indian Wealth Tax Act, 1957, Sch. Part I, Para. B, R.1(i).
Where the assessee was a co-owner of a property used for business purposes in partnership with other two co-owners:
Held that the Tribunal was right in holding that the property known as G of which the assessee was owner of 1/3rd share could be treated as "business premises" within the meaning of Rule 1(i) of Para B of Part I of the Schedule to the Wealth Tax Act, 1957, even though the property was let out to the firm of G in which the assessee was a partner. Hence, no additional wealth tax was leviable in respect of the property.
CIT v. K.M. Jagannathan (1989) 180 ITR 191 (Mad.) applied.
C.V. Rajan for the Commissioner.
P.P.S. Janarthana Raja for Assessee.
JUDGMENT
VENKATASWAMI, J.---The questions referred to this Court read as follows:--
"(1) Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right m holding that no additional wealth tax is leviable in respect of the property known as Geeta Lodge in which the assessee has got 1/3rd share?
(2) Whether, on the facts and m the circumstances of the case, the Appellate Tribunal was right in holding that the property known as Geeta Lodge of which the assessee is owner of 1/3rd share could be treated as 'business premises' within the meaning of rule 1(i) of Para B of Part I of the Schedule to the Wealth tax Act, 1957, even though the property was let out to the firm of Geeta Lodge & Co., in which the assessee is a partner ?"
The questions are common for both the cases as the assessee is the same. However, the assessment years are different. The assessee is a co-owner of the property in question, which is used for business purposes in partnership with two other co-owners. The question that was raised before the Tribunal was whether the use of the business premises in partnership would amount to the use by the assessee. The Tribunal answered the said question in favour of the assessee. Aggrieved by it, the Revenue has come up to this Court seeking answers to the above two questions.
Learned counsel appearing for the Revenue fairly states that the principles laid down by this Court in the case of CIT v. K.M. Jagannathan (1989) 180 ITR 191, interpreting the scope of section 22 of the Income-tax Act, 1961, will apply to the facts of these cases. Applying the ratio laid down in the decision stated supra, we answer the questions in the affirmative and against the revenue. No costs.
M.B.A./822/FT
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