By C. N. Vaze
Shailesh Kamdar
Jagdish T. Punjabi
Bhadresh Doshi
Chartered Accountants
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New Page 1
Part
A: Reported Decisions
26 ACWT v. Ku. Ragini Sanghi
123 ITD 384 (Indore)
A.Ys. : 1997-98 and 1998-99
Dated : 25-1-2008
Exemption available under the law should be granted by the
Assessing Officer, even if the assessee has not claimed it in its return of
income.
The assessees are beneficiaries of a trust and enjoy 50%
share of interest in the assets of this trust. The trust owned a flat which was
a residential house. As per the assessment order of the trust, the value of
assets owned by it was to be included in the hands of beneficiaries. Since no
interest in the assets of trust was shown in the original return of
beneficiaries, notice u/s.17 was issued to the beneficiaries. The assesses
submitted that the flat was exempt u/s.5(1)(vi) of the Wealth-tax Act since they
had no other residential house in their names. Thus the value of the flat was
shown as NIL. It was contended on behalf of Department that since the assessee
claimed deduction at the assessment stage and not in the return of wealth, it
should not be allowed.
Held :
S. 5(1)(vi) of the Wealth-tax Act clearly provides for the
exemption of one house and as such, the law as it stood should have been applied
by the AO for granting exemption. There is no need for the assessee to seek
exemption as per law. Even when the assessee has not sought exemption expressly,
the AO should apply the statutory provisions and grant exemption.
