JUDGMENT
K.S. Paripoornan, J.
1. This batch of five referred cases involves consideration of the same question of law. It is at the instance of the Revenue that the Income-tax Appellate Tribunal, Cochin Bench (in short, “the Tribunal”), has referred the aforesaid five cases. The matter arises under the Wealth-tax Act, 19S7 (in short, “the Act”). The same assessee is the respondent in all the five cases. Income-tax References Nos. 139 and 140 of 1984 relate to the assessment years 1973-74 and 1974-75, respectively. Income-tax References Nos. 14 to 16 of 1985 relate to the assessment years 1975-76,1976-77 and 1977-78, respectively. At the instance ‘ of the Revenue, the Tribunal has referred the following common question of law in all the five cases for the decision of this court ;
” Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the assessee is entitled to exemption under Section 5(1)(iv) in respect of the value of the whole building and not merely in respect of the proportionate value of one of the shop rooms in the building?”
2. The same question was raised for consideration in all the cases for the assessment years 1973-74 to 1977-78.
3. Amongst others, the net wealth of the respondent-assessee included the value of a building situated in Broadway, Ernakulam. It consisted of four shop rooms which had different municipal numbers. The building was valued at Rs. 80,500. The assessee claimed that the entire building should be regarded as a house and claimed exemption for the same under Section 5(1)(iv) of the Act. The Wealth-tax Officer limited the exemption under Section 5(1)(iv) of the Act to the proportionate value of one shop room in the building. This decision was affirmed in appeal by the Appellate Assistant Commissioner. The Tribunal, following its earlier order in the case of Mrs. Urmila Manikanth Shah in W. T. A. Nos. 65 and 66/ (Coch.) of 1982 dated March 27, 1981, held that the exemption claimed shall not be restricted to only one of the several shop rooms in the building. It was held that the assessee is entitled to exemption in respect of the value of the entire building, subject to the limitation prescribed under Section 5(1)(iv) of the Act. The Tribunal found that the facts in this batch of five cases are similar to those in the case of Mrs. Urmila Manikanth Shah’s case (W. T. A. Nos. 65 and 66/(Coch.) of 1982). In the said case, the property consisted of four shops. All the shop rooms were constructed in one building. They were different self-contained units. They were under the same roof, but were given one municipal number and additional sub-numbers. Relying on a Bench decision of the Allahabad High Court in Shiv Narain Chaudhari v. CUT [1977] 108 ITR 104, the Tribunal held that several self-contained dwelling units, which are contiguous and situate in the same compound and with common boundaries and having unity of structure could be regarded as one house. In the light of the Tribunal decision in Mrs. Urmila Manikanth Shah’s case aforesaid and the facts in the present case, the Tribunal held that the exemption under Section 5(1)(iv) of the Act should not be restricted to one of the several shop rooms in the building, but should be allowed in respect of the value of the entire building, subject to the limitation prescribed under Section 5(1)(iv) of the Act. It is thereafter at the instance of the Revenue that the question of law formulated hereinabove has been referred for the decision of this court.
4. We heard counsel for the Revenue, Mr. N. R.K. Nair, as also counsel for the assessee. At the time of hearing, it was common ground that the exemption provided under Section 5(1)(iv) of the Act is available even for houses used for commercial purposes. This is based on the circular letter of the Central Board of Direct Taxes, referred to in the order of the Tribunal in paragraph 4, dated March 27, 1981-F. No. 370/23/73/ W. T. dated July 29, 1973 (referred to in “Chaturvedi and Pithisaria’s ‘Three Taxes’, 1989
Edn., Vol. 1, Wealth-tax, page 152″ as ” Circular Letter F. No. 317/23/73/ W. T. dated July 24, 1973″). We have to proceed on the basis that, as in the case of Mrs. Urmila Manikanth Shah aforesaid, the building herein consisted of several shop rooms and self-contained units. But they are all under the same roof and bearing a single municipal number, with additional sub-numbers. The question is whether the assessee is entitled to exemption of the entire building or only to one of the several shop rooms in the building. Section 5(1)(iv) of the Act provides that wealth-tax shall not be payable by an assessee in respect of “one house or part of a house belonging to the assessee”. The question is : whether,’ in a case where there are several independent shop rooms in a building, bearing a single municipal number and sub-numbers, or different municipal numbers, the assessee would be entitled to exemption in respect of the value of the entire building and not restricted to one of the several shop rooms in the building. In Shiv Narain Chaudhari’s case [1977] 108 ITR 104, a joint Hindu family had four different independent residential units which were connected with a common passage in a building owned by them and bearing municipal door Nos. 92 and 92A in Dharbhanga Castle. A question arose as to whether they could be regarded as forming one house or those two portions constituted two different houses. It was found that both portions of the building, bearing door Nos. 92 and 92A, were contiguous to each other and were within one common boundary and common compound. There were four residential units within that building. The building has unity of structure. The Allahabad High Court held that the fact that different door numbers are assigned to different portions by the municipality and assessed separately may be relevant circumstances in considering whether the two portions constitute one house or two different houses. But these circumstances are not decisive. In that case, it was held that since the two portions of the building are contiguous and situate in the same compound and with common boundaries and have unity of structure, there is no reason why they should not together be regarded as constituting one house.
5. We are of the view that the approach and test laid down by the Allahabad High Court in the aforesaid decision in Shiv Narain Chaudhari’s case [1977] 108 ITR 104, is a correct one and in the light of the said decision, the Tribunal was justified in holding that the assessee is entitled to exemption under Section 5(1)(iv) of the Act in respect of the value of the whole building and not merely in respect of the proportionate value of one of the shop rooms in the building. We answer the question referred
to this court in the affirmative, against the Revenue and in favour of the assessee. All the references are answered as above.
6. A copy of this judgment under the seal of this court and the signature of the Registrar will be forwarded to the Income-tax Appellate Tribunal, Cochin Bench.