WEALTH-TAX OFFICER v. S.K. SINGLA
[Citation -1984-LL-1220-4]

Citation 1984-LL-1220-4
Appellant Name WEALTH-TAX OFFICER
Respondent Name S.K. SINGLA
Court ITAT
Relevant Act Wealth-tax
Date of Order 20/12/1984
Assessment Year 1979-80
Judgment View Judgment
Keyword Tags incomplete house • valuation date
Bot Summary: In the original assessments, exemption was granted and, subsequently, under proceedings under section 17(1) of the Act, cases were reopened and reassessments were framed by the WTO denying the exemption to all the assessees on the plea that the house in question styled as 'Singla house', in which all the assessees had one-seventh share, each unit belonging to each of seven co-owners, being neither habitable as a whole or in part, exemption was denied. The learned senior departmental representative, Mr. R.K. Bali, submitted that the house in question as a whole or in part, so far as seven assessees are concerned, was neither complete nor the same was habitable as in respect of t h e three assessees, i.e., O.P. Singla, Deepak Singla and S.K. Singla; Rs. 10,000 in respect of share of each one of them and Rs. 5,000 in respect of each of the four co-owners, B.D. Singla, Sudhir Singla, A.K. Singla and V.K. Singla, were spent after 31-3-1979, which was the date of valuation for the year under consideration. The learned counsel for the assessee, Mr. O.P. Bansal, on the other hand, beside relying on the orders of the AAC, submitted that even proceedings under section 17(1) in these cases were invalid and assessments framed were null and void, but he was fair enough to admit that neither these assessees are i n appeals nor in cross-objections and he agreed that all he could do in this respect was to support the orders of the AAC as a counsel for respondents. In the case of a newly built house, it is impossible to occupy the same and utilise it for residential purposes for even a man of ordinary means, what to talk of the assessees who in all invested over 7 lakhs of rupees in the property, as a whole when we really carefully go through the said decision of K.B. Pradhan's case, cited by the learned senior departmental representative, which is also relied upon by the learned counsel for the assessee, we are constrained to reverse the finding of the AAC. At page 395 of the report, what is mentioned reads as under: The word 'house' has no statutory definition and, therefore. ' Though the concept of residence has been omitted from the provision by amendment, we are not prepared to accept the submission of the assessee's counsel that 'house' or 'a part of house' can cover a situation where the house is not habitable. In the instant case, when we go through the letter written by all the assessees, it is clear, as per paragraph above quoted, that respective portions of all these assessees in question were not habitable, as neither windows, window-panes or wire-netting were fixed nor the same were whitewashed or painted. On the basis of facts and submissions made by the learned counsel before the WTO, we are convinced that neither the house as a whole nor respective portions of the seven assessees was ready for occupation before 31-3-1979 and the same being not habitable, as observed by their Lordships of the Orissa High Court, the assessees were not entitled to get exemption under section 5(1)(iv).


only dispute raised by revenue in these appeals under Wealth- tax Act, 1957 ('the Act'), pertains to exemption under section 5(1)(iv) of Act of property built by seven co-owners, viz., S.K. Singla, O.P. Singla, Deepak Singla, B.D. Singla, Sudhir Singla, A.K. Singla and V.K. Singla. Since facts in background of these appears are common and each of seven assessees held one-seventh share in house known as 'Singla house' under construction, findings of WTO and that of AAC being same in all cases and same being grounds of appeals raised by revenue and same were arguments of both parties, learned senior departmental representative, Mr. R.K. Bali, and learned counsel for assessee, Mr. O.P. Bansal, this group of seven cases was heard together and is being disposed of by this consolidated order for sake of convenience. 2. common assessment year involved is 1979-80. In original assessments, exemption was granted and, subsequently, under proceedings under section 17(1) of Act, cases were reopened and reassessments were framed by WTO denying exemption to all assessees on plea that house in question styled as 'Singla house', in which all assessees had one-seventh share, each unit belonging to each of seven co-owners, being neither habitable as whole or in part, exemption was denied. 3. AAC, when reassessments under section 17(1) came to be disputed before him, both in respect of initiation of proceedings and on merit, rejected contentions of assessee regarding initiation of proceedings but granted exemption to all parties on merit, mainly observing that light, water and sewerage connections, so far as concerned with house, were complete and even whitewashing of rooms was over. It is this action of AAC, which is disputed by revenue before us. 4. learned senior departmental representative, Mr. R.K. Bali, submitted that house in question as whole or in part, so far as seven assessees are concerned, was neither complete nor same was habitable as in respect of t h e three assessees, i.e., O.P. Singla, Deepak Singla and S.K. Singla; Rs. 10,000 in respect of share of each one of them and Rs. 5,000 in respect of each of four co-owners, B.D. Singla, Sudhir Singla, A.K. Singla and V.K. Singla, were spent after 31-3-1979, which was date of valuation for year under consideration. He submitted that said amount was spent on whitewashing, painting, fixation of windows and window-panes, etc., in respect of which he mainly relied on identical letters written by all these assessees to WTO on 12-8-1983, copy of which he placed on revenue's compilation and so far as law was concerned, he relied on case of CWT v. K.B. Pradhan [1981] 130 ITR 393 (Ori.). He submitted that house in question may be habitable for chowkidar, rickshaw-wala or for any man of small means but not for assessees, who in all invested lakhs of rupees on construction and share of each one of them, so far as investment was concerned, exceeded over lakh. 5. learned counsel for assessee, Mr. O.P. Bansal, on other hand, beside relying on orders of AAC, submitted that even proceedings under section 17(1) in these cases were invalid and assessments framed were null and void, but he was fair enough to admit that neither these assessees are i n appeals nor in cross-objections and he agreed that all he could do in this respect was to support orders of AAC as counsel for respondents. He also relied on K.B. Pradhan's case and submitted that in case this case is carefully pursued, studied and gone through, it supports contentions of assessees. 6. After taking into consideration rival submissions and looking to facts available on record, we are unable to confirm finding of AAC. All assessees, in their identical letter dated 12-8-1983, have submitted as under: " It is further submitted that as on 31-3-1979, valuation date, 'Singla House' was almost complete. Some small works such as whitewashing, painting, fitting of window-panes and wire-netting, etc., were in progress and were nearer to completion. " They, however, submitted that factum that assessees occupied their respective shares in said house in June 1979 was due to fact that, that was auspicious day. Against this letter, we are unable to appreciate observations of AAC, who mentioned in para 4 of his orders as under: " ...It has been submitted that even whitewashing of rooms was over. reason for not occupying house in March 1979 was given that auspicious day for occupying house was in June 1979. " This actually is misstatement of facts, on basis of which AAC accepted contentions of assessees. All assessees, in their respective letters, have admitted that whitewashing has not been done and window-panes with wire-netting, etc., were not yet fixed. When we look to house as whole, and also in respect of portions built by all seven co-owners on one side, and factum that neither windows nor panes and wire-netting were fixed in newly built house, besides whitewashing and painting was also not done till 31-3-1979. In case of newly built house, it is impossible to occupy same and utilise it for residential purposes for even man of ordinary means, what to talk of assessees who in all invested over 7 lakhs of rupees in property, as whole when we really carefully go through said decision of K.B. Pradhan's case, cited by learned senior departmental representative, which is also relied upon by learned counsel for assessee, we are constrained to reverse finding of AAC. At page 395 of report, what is mentioned reads as under: " word 'house' has no statutory definition and, therefore. it has to be given common parlance meaning. dictionary meaning for words seems to be 'building for dwelling in, building in general, dwelling place'. It also conveys meaning of 'abode, habitation, etc.' Though concept of residence has been omitted from provision by amendment, we are not prepared to accept submission of assessee's counsel that 'house' or 'a part of house' can cover situation where house is not habitable. We are prepared to go to extent that if house was once habitable and became uninhabitable on account of want of repairs, exemption provision may yet operate. Where, however, house is in process of construction and, on account of fact that it is not complete, has not reached habitable stage, we do not think concept of house can be extended to cover such incomplete construction. submission of counsel for assessee that use of words 'a part of house' has meaning of incomplete house is of no importance. Obviously, Parliament has intended to exempt part of house where assessee's interest extends to part of it. concept of house where assessee's interest extends to part of it. concept of habitability is inherent in word 'house' and unless it is habitable, abode would not answer commonsense meaning of house. In instant case, there is no clear finding by Tribunal as to whether with investment made during two relevant years, construction had reached habitable stage. Merely from fact that something more remained to be done in year beyond two years in review, it may not be presumed that house had not come to habitable condition on valuation dates. While we do not agree with assessee's counsel that habitability is not test, we are of view that Tribunal would do well in recording finding as to substantial position of construction on two relevant dates. If it reaches conclusion that construction had reached habitable stage, that would amount to house and exemption would be available. If, however, it is found that incomplete house was not in habitable condition during either of years, it would follow that exemption would not be extended and assessee's claim would not be admissible.... " With above observations in said case, matter was referred to by Orissa High Court back to Tribunal. In instant case, when we go through letter written by all assessees, it is clear, as per paragraph above quoted, that respective portions of all these assessees in question were not habitable, as neither windows, window-panes or wire-netting were fixed nor same were whitewashed or painted. learned counsel for assessee, even on asking of Bench, was unable to cite any decision in his favour, except that he also relied on this very decision which unfortunately, if read as whole, does not support contentions of assessees at all but instead supports contentions of revenue. Even on asking of Bench again and again, he was not able to give case contrary to one relied upon by learned senior departmental representative. We are afraid, in light of decision in CIT v. Smt. Godavaridevi Saraf [1978] 113 ITR 589 from Bombay High Court, we are bound to follow decision of Orissa High Court, since that is sole and singular decision on issue. Even in course of arguments, when it was put to learned counsel for assessee by Bench, as to how much shall be expenses on whitewashing or panes, his unequivocal submission was that thousand or fifteen hundred in each case. When we look to three cases, those of O.P. Singla, Deepak Singla and S.K. Singla, we find Rs. 10,000 was subsequently invested in respect of their respective shares whereas in respect of B.D. Singla, Sudhir Singla, A.K. Singla and V.K. Singla, Rs. 5,000 each were further invested. In respect of these investments as well, learned counsel for assessees submitted that it was more or less bifurcation because in case of those, who were earlier debited for lesser amount, Rs. 10,000 were assigned. total investment to complete house ran into about Rs. 50,000, which was spent from March to June 1979. We are unable to appreciate contention of learned counsel for assessee that Rs. 50,000 is too small amount as compared to investment of lakhs of rupees, when we look to items on which same was spent which were windows, window-panes, fixation of wire-net on windows, whitewashing, painting, etc. Neither before two lower authorities nor before us, it was asserted by anyone of assessees that they ever slept in said house even for day before 31-3-1979. In respect of newly constructed house, mere light and water connections could not be of any assistance to assessee's case because both these connections are normally obtained before construction is started or in course of construction. So far as sewerage connection is concerned, it is wrong to say that any sewerage connection was there, in respect of this property, because it is situated at Karnal and, as per assessees themselves, there is nothing like sewerage connection at Karnal. All that they made was septic tank which, of course, was made in course of construction earlier. It is fact of life, which cannot be denied, that in case of new construction, though septic tank is made much before and provision is made for sanitary fittings yet same are fixed and installed actually at last moment in order to avoid breakage, rusting or getting same spoiled by paint, etc. On basis of facts and submissions made by learned counsel before WTO, we are convinced that neither house as whole nor respective portions of seven assessees was ready for occupation before 31-3-1979 and same being not habitable, as observed by their Lordships of Orissa High Court, assessees were not entitled to get exemption under section 5(1)(iv). action of AAC is, therefore, reversed. 7. revenue's appeals are allowed. *** WEALTH-TAX OFFICER v. S.K. SINGLA
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