ORDER
Per Shri T. C. A. Ramanujam, Accountant Member – These five appeals involve common contentions and are disposed of by this consolidated order.
2. The issue raised in all these appeals concerns the denial by the CWT (A) of relief under section 7(4) of the W. T. Act, 1957. The appellant owned a residential house at Courtallam. Its value was included in the net wealth for all the years. In the appeal before CWT (A), it was pleaded that the exemption under section 7(4) should have been allowed in respect of the property. This was the only property owned by the appellant for residential purposes and, therefore, the value as on 1-4-1971 was sought to be substituted by the appellant for the market value. The CWT (A) rejected this submission outright. He gave two reasons. Firstly, he pointed out that the property could not have been used by the appellant for residential purposes throughout the period of 12 months immediately preceding the valuation dates. Secondly, he pointed out that the exemption under section 7(4) may not be available to the H. U. F. may be residing at various places.
3. Before us, it was argued that physical occupation for all the 365 days was not contemplated by section 7(4) that the term “used” suggested only that the assessee should not have let out of the property for the use of others. Section 7(4) referred to inclusive user by the assessee and the CWT (A) has placed an unduly narrow interpretation on the words “exclusively used by him” in the section. Reliance was placed on the ruling of the Tribunal in the case of ITO v. K. L. Ramachandra [1984] 9 ITD 643 (Bang.) wherein the benefit under section 23(2) of the I. T. Act, 1961 was extended to a Hindu Undivided Family.
4. On behalf of the Department Shri S. K. Jha sought to reinforce the argument of the CWT (A) and contended that section 7(4) contemplated exclusive user for the whole year. This section was different from section 23(2) of the I. T. Act.
5. We agree with the learned counsel for the appellant that the term “exclusively used” contemplates reservation of the house to the appellant only and no body else. It is enough if the house is ready for occupation at any time of the year without being let out. In this case, the Courtallam property is the only residential house of the appellant and there is no other property fit for occupation as residence as per the ground stated before us. Section 7(4) allows freezing of the value as on 1-4-1974 in respect of one residential house. The benefit cannot be denied merely because the appellant was not occupying the house for all the 365 days of the year.
6. The second objection of the CWT (A) to the allowance of relief under section 7(4) is that the appellant is a Hindu Undivided Family and not an individual. While considering the corresponding provision of section 54 of the I. T. Act, the Madhya Pradesh High Court in Shrigopal Rameshwardas v. Addl. CIT [1979] 119 ITR 980 held that the benefit of section 54 of the I. T. Act was not available to artificial juridical persons like a H. U. F. The High Court was guided by the use of the word “parent” in section 54 in arriving at the conclusion that the benefit of that provision was available only to an individual. There is no such word occurring in section 7(4) of the W. T. Act, which could lead to the inference that the benefit of the provision should be restricted to an individual assessee. Nor can the use of the word “him” in section 7(4) can lead to the conclusion that the provision applies only to living persons alone. It is not uncommon to use the third person “him” even for artificial person. In this connection, the following Circular of the C. B. D. T. in F. No. 328/173/85-WT, dt. 30-5-86, addressed to the Commissioner of Income-tax, Coimbatore, may be reproduced :-
“Sub :- Provisions relating to section 7(4) of the W. T. Act, 1957 – Interpretation reg ….
I am directed to refer to your letter C. No. 1480/85-86/CBE dated 5th December 1985 on the above subject and to inform you that the Ministry of Law has opined that HUFs are also entitled to the benefit of section 7(4) of the Wealth-tax Act, 1957. A copy of the advice of Ministry of Law is enclosed in this regard for your record and reference.
Sd/-
A. K. Fotedar,
Encl. :- As above.
Under Secretary, C.B.D.T.”
7. We consider that the appellant should be allowed the benefit of the provisions of section 7(4) for all the years.
8. to 12. These paras are not reproduced here, as they involve minor issues.