Income Tax Appellate Tribunal - Madras
Wealth-Tax Officer vs Smt. Ayisathu Jailani on 9 June, 1988
Equivalent citations: [1989]28ITD299(MAD)
ORDER
T.N.C. Rangarajan, Judicial Member
1. These appeals by the Revenue are directed against the orders of the AAC holding that the residential property of which the assessee was the co-owner should be valued by applying the provisions of Section 7(4) of the WT Act. The assessee has a 50 per cent share in the property at No. 11, Shafee Md. Road, Madras, the other 50 per cent share being held by her minor daughter, both of whom live in that house. The assessee claimed that it was being exclusively used by the assessee for residential purposes throughout the 12 months preceding the valuation date and, therefore, the value should be taken as that on the valuation date relevant to the assessment year 1971-72. The AAC accepted this claim.
2. The Revenue is in appeal to contend that because the assessee was only a 50 per cent owner of the property, it could not be said that the assessee had exclusively used the property for residential purposes since 50 per cent of the property belonged to the other co-owner. We are unable to accept this contention of the Revenue. Section 5(1)(iv) of the WT Act also had the words 'exclusively used by him for residential purposes' and the Delhi High Court had occasion to consider the meaning of this phrase in CWT v. Mrs. Avtar Mohan Singh [1972] 83 ITR 52 (Delhi). It was pointed out by the High Court that it only meant that the property should be used for residential purposes only and not that the assessee should alone reside in the house to the exclusion of everybody else. It has also been held in the case of CWT v. B.M. Bhandari [1980] 123 ITR 554 (AP) that--
The words 'exclusively used by him for residential purposes' in Section 5(1)(iv) should be interpreted pragmatically, fairly and reasonably and not in a pedantic sense. The assessee may himself use or authorise any of his friends or relatives to reside in the house throughout the year without interruption unless the assessee has let out the house or used the house for any other commercial purpose, it cannot be said that the house was not exclusively used by him for residential purposes.
Secondly, the user by the minor daughter even though it was on her own right was consistent with the user of the assessee because the assessee had only 50 per cent share in the property which is being assessed to tax. It cannot be said that in the case of joint ownership each co-owner should have the exclusive use of the property in the sense of user to the exclusion of the other co-owner before being entitled to the benefit of Section 7(4). The word 'exclusively' in this section qualifies the nature of the use, viz., that the property should be used exclusively as residence rather than the nature of the assessee in the sense that the assessee alone should have the user. This is evident from the Finance Minister's speech while introducing Sub-section (4) to Section 7 (102 ITR - Statutes - 93 at 94):
In order to remove the hardship faced by owners of self-occupied property who are now required to furnish its fair market value in the return of net wealth every year, it is proposed to freeze the value of one self-occupied house property at the value adopted for the year in which the property is constructed or acquired by the assessee, or for the year 1971-72, whichever is later.
Even if it should qualify the assessee, such user can only be consistent with the extent of the ownership and not extend beyond, i.e., to the exclusion of the joint owner equally entitled to the user of the property and residence therein. In the circumstances, as long as it is considered that the property belongs to the assessee, to that extent it must also be conceded that it was exclusively used by her for her residence. We should also keep in mind the particular facts of this case where the co-owners are the mother and a minor daughter. If it is to be insisted that the assessee-mother should have an exclusive residence, it may go against the public policy of maintenance and protection of a minor child. Such a view recalls to our mind a similar argument in an estate duty case where the husband was living in a house gifted by him to his spouse and it was sought to be contended that she was not having exclusive use of the property. In the picturesque words of Justice Mukherji as observed in the case of Mrs. Shamsun Nehar Mansur v. CED [1969] 71 ITR 301, 307 (Cal.) :
No construction should be put on the Estate Duty Act so as to be against the public policy to the extent that whenever a husband makes a gift of a property to his wife he should lose both the property and the wife.
We are of the opinion that on the facts of this case also we should not accept a construction which requires that a minor child, who is the other co-owner, has to be kept out of residence for purpose of the assessee-mother, who is a co-owner of the house, being given the benefit of Section 7(4) of the Act. We are, therefore, satisfied that the AAC was right in holding that the conditions prescribed have been fulfilled and the assessee was entitled to be assessed under Section 7(4) of the Act.
3. In the result, the appeals are dismissed.