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COMMISSIONER OF WEALTH TAX (CENTRAL), LU v. M/S. SUDERSHAN LAL & SONS, LUDHIANA - WTC-20-1990  RD-P&H 3361 (23 May 2006)
IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH
W.T.C. NO. 20 OF 1990
DATE OF DECISION:24.04.2006
COMMISSIONER OF WEALTH TAX (CENTRAL), LUDHIANA ....PETITIONER
M/S. SUDERSHAN LAL & SONS, LUDHIANA
CORAM: HON'BLE MR.JUSTICE ADARSH KUMAR GOEL
HON'BLE MR. JUSTICE RAJESH BINDAL
PRESENT: MR. D.S. PATWALIA, ADVOCATE
FOR THE REVENUE -PETITIONER
This is a petition filed under Section 27 (3) of the Wealth Tax Act, 1957, seeking a direction to the Income Tax Appellate Tribunal, Chandigarh Bench, Chandigarh to draw statement of case and refer the following question of law, arising out of the order dated 18.8.1988 passed in W.T.A. No. 209 of 1987, for the assessment year 1982-83, to this Court for it's opinion:
"Whether on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the assessee was entitled to deduction under Section 5 (1) (iv) in respect of its share in the land and building owned by the firm, styled M/s. O.K. Hosiery Mills, Ludhiana in which it is a partner ?"
We have heard Sh. D.S. Patwalia, Advocate, counsel for the Revenue. He could not dispute that this Court in C.W.T. v. Mrs. Anju Munjal [1999 ] 240 ITR 918 has already decided the issue sought to be raised in the present case in favour of the assessee, following it's earlier judgment in the case of C.W.T. v. Vipin Kumar  203 ITR W.T.C. NO. 20 OF 1990 
941 which has attained finality. The relevant para of the judgment in Vipin Kumar's case (supra) is extracted below: "According to the principles of English jurisprudence which we have adopted in India for the purpose of determining legal rights, there is no such thing as a firm known to the law. In Addanki Narayanappa v. Bhaskara Krishnappa, AIR 1966 SC 1300, it was clearly held by their Lordships of the Supreme Court that, since a firm has no legal existence, the partnership property will vest in all the partners and in that sense, every partner has an interest in the property of the partnership. In Juggilal Kamlapat Bankers v. WTO  145 ITR 485, the apex court held that the interest of a partner in a partnership firm belonged to him and would be includible in his "assets" and will have to be taken into account while computing his net wealth. In this view of the matter, the assessees in the present case could be said to be having specific interest in the factory land and the building belonging to the firm and, as such, were entitled to the exemption granted to them by the Tribunal.
Moreover, rule 2 of the Wealth-tax Rules, providing for the detailed method of determining the value of the interest of a person in a firm of which he is a partner is a pointer to the fact that in the context of wealth-tax, a partner can claim to have a specific interest in its assets exclusively apart from his interest as a partner in the firm. We have already observed that the property of the firm is, in fact, the property of its partners and, consequently, we cannot accept the contention of the Revenue that since the factory land and the building in the present case belong to the firm, the two assessees who were partners therein were not entitled to claim any deduction under section 5 (1)(iv) of the Act. The view that we have taken finds support from CWT v.
Vasantha  87 ITR 17 (Mad); CWT v. Mrs.
Christine Cordoza  114 ITR 532 (Kar); CWT v.
Mira Mehta  155 ITR 765 (Cal) and CWT v.
Tarachand Agarwalla  180 ITR 234 (Gauhati)." W.T.C. NO. 20 OF 1990 
The same view has been expressed by Madras High Court in C.W.T. v. M.Appuswami  233 ITR 460 and C.W.T. v. R. Ariff and others  246 ITR 797.
Counsel has also referred to two judgments in the cases of Purushothamdas Gocooldas and others v. C.W.T. (Mad.)  104 ITR 609 and Prakash Chand Modi v. C.W.T. (Raj.)  225 ITR 541 to support his arguments that the question of law raised by the Revenue in the petition should be directed to be referred to this Court for it's opinion, since the similar question raised in the above judgments has already been answered against the assessee and in favour of the Revenue through by other Courts.
Since the issue sought to be raised by the Revenue is already covered by the judgment of jurisdictional High Court, we do not deem it appropriate to refer the question of law to this Court again merely because other Court has taken a view different to this Court. Once this Court has already expressed it's opinion on the question of law sought to be raised, there is no valid reason to direct the Tribunal to refer the same question of law to this Court.
Hence, the present petition is dismissed.
APRIL 24,2006 (ADARSH KUMAR GOEL)
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