TaxTMI 
TaxTMI 
1992 (8) TMI 30
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....-75 and 1975-76. Shri Vipin Kumar, in his individual capacity, was a partner in a firm which was working under the name and style of Gurdaspur Roller Flour Mills, Gurdaspur, during the assessment years in question and he had an 11 per cent. share in it. He claimed for all these three years exemption under section 5(1)(iv) of the Act in respect of an amount of Rs. 74,140 being the value of his share in the immovable property belonging to the firm, namely, the factory land and building. Similarly, Shri Satish Kumar, Hindu undivided family, was also a partner in the same firm during the relevant assessment years. The Hindu undivided family which is the assessee claimed exemption under section 5(1)(iv) of the Act in respect of an amount of Rs.....
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....e factory land and building belonging to the firm in which he is a partner ? 2. Whether, on the facts and in the circumstances of the case, the Tribunal is right in law in holding that the assessee-Hindu undivided family is entitled to the exemption under section 5(1)(iv) of the Wealth tax. Act in respect of the factory land and building belonging to the firm from which it derived a share of profit ?" Section 5(1)(iv) of the Act, as it stood during the relevant assessment years, reads as under : "Section 5(1).-Subject to the provisions of sub-section (1A), wealth-tax shall not be payable by an assessee in respect of the following assets and such assets shall not be included in the net wealth of the assessee-..... (iv) one house or part ....
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....portion of the house property as exclusively belonging to them and were, thus, not entitled to claim the exemption under section 5(1)(iv) of the Act. We find no sub stance in this contention. It is by now well-settled that a firm as such is not a legal entity and any property owned by it is really the property of the partners and the use of the expression "firm" is only a compendious mode to designate the persons who have agreed to a joint venture and what is called the property of the firm is really the property of the partners. The firm, is not recognised as a distinct entity from the members constituting it. It is true that the law has for some specific purposes relaxed its rigid notions and extended a limited personality to a firm, for ....
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....he 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 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....