ORDER
N. K. Agrawal, J.
The following question arising from the assessee’s wealth-tax case for the assessment year 1979-80 has been referred by the Tribunal at the instance of the department under section 27(1) of the Wealth Tax Act, 1957 (hereinafter referred to as “the Act”) :
“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 his share in the land and building owned by the firm styled M/s Rockman Cycle Industries, Ludhiana, in which he is a partner?”
2. The assessee was a partner in a partnership firm. He claimed exemption for his share in the property of the firm under section 5(1)(iv) of the Act. The Wealth Tax Officer declined to allow exemption, holding that the property belonged to the partnership firm whereas the exemption was available to a house or part of a house belonging to the assessee.
3. Tribunal took the view that exemption was to be allowed to the assessee in respect of his share in the property held by the firm and the value of his share was not to be included in his taxable wealth.
4. A Division Bench of this court had an occasion to examine a similar question in CWT v. Vipin Kumar (1993) 203 ITR 941 (P&H).
After examining the question whether the assessee was entitled to the exemption in respect of the property belonging to the firm in which he was a partner, it was observed at as under :
“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. Wealth Tax Officer (1984) 145 ITR 485 (SC), 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 (1973) 87 ITR 17 (Mad), CWT v. Mrs. Christine Cardoza (1978) 114 ITR 532 (Karn), CWT v. Mira Mehta (1985) 155 ITR 765 (Cal) and CWT v. Tarachand Agarwala (1989) 180 ITR 234 (Gau).”
5. Taking the same view as taken in the aforesaid case by this court, the question is answered in the affirmative and in favour of the assessee.