Full Judgment
M. Katju, J.
Heard learned counsel for the parties.
2. This is a wealth-tax reference under section 27(1) of the Wealth Tax Act, 1957, in which the following question has been referred to us for our opinion :
'Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the assessee is entitled to exemption under section 5(1)(iv) of the Wealth Tax Act in respect of cinema building owned by this firm ?'
3. The assessee is a firm and the relevant assessment years are 1974-75 to 1977-78. The assessee has 50 per cent share in the firm, Jain Kishan Anand Swarup, Bulandshahr. The assets of the firm consist of a cinema building, and the question in this case is whether the assessee's 50 per cent share in the value of the cinema building is exempt from wealth-tax. The Wealth Tax Officer rejected the claim of the assessee but the Appellate Assistant Commissioner allowed his claim. The Tribunal dismissed the second appeal filed by the department.
4. The short question in this case is whether a cinema building can be treated to be a house for the purposes of section 5(1)(iv) of the Wealth Tax Act. Section 5(1)(iv) at the relevant time stated that the following asset shall not be included in the net wealth of the assessee :
'One house or part of a house belonging to the assessee.'
The word 'house' has not been defined in the Wealth Tax Act, nor in the General Clauses Act. However, the word 'building' has been used in section 5(1)(iii) of the Wealth Tax Act, and in section 5(1)(i) the word 'property' has been used.
Thus the Wealth Tax Act has used the words 'house', 'building' and 'property' in different places, and hence different meanings should ordinarily be ascribed to these words in accordance with the settled principles of interpretation. We, therefore, do not agree with learned counsel for the assessee that all buildings must be regarded as houses within the meaning of the term use in section 5(1)(iv).
In common parlance a house means a place where people live. Of course a residential building can also be given for commercial purpose and yet it will remain a house. However, by no stretch of imagination can a cinema hall be regarded as a house. No one ever calls a cinema hall a house.
5. Learned counsel for the assessee has relied on the judgment of the Rajasthan High Court in CWT v. Tulsi Dass , wherein it has been held that a cinema hall is a house. We respectfully disagree with the view taken by the Rajasthan High Court. The Rajasthan High Court in that decision has held that for getting exemption under section 5(1)(iv) it is not necessary that the house be exclusively used for residential purposes. We agree with this reasoning of the Rajasthan High Court that even if a house is used for commercial purposes it will nevertheless remain a house which can claim exemption. However, if it is not a house at all in its inception then it cannot get exemption under section 5(1)(iv). There may be cases where a person uses or has given his residential house on rent, for commercial purpose but it will still remain a house, But if the building is not a house at all it cannot get exemption.
6. In New Shorter Oxford English Dictionary, the word 'house' is defined as follows: 'a building for human habitation, a dwelling, a home'. In Legal Thesaurus by William C. Burton a house is defined as 'abode, dwelling place, home, habitation, living place, living quarters, residence, etc.'
7. In P. Ramanatha Aiyar's Law Lexicon (1997 edition), a house is defined as a place of dwelling or habitation.
In Chapman v. Royal Bank of Scotland (1881) 7 QB 136, it was held that a house means 'a permanent building in which the tenant, or the owner and his family, dwells or lives.'
8. The same interpretation has been given by our courts, e.g., in Shiv Narain Chaudhari v. CWT : [1977]108ITR104(All) ; CWT v. K. B. Pradhan : [1981]130ITR393(Orissa) , etc.
It may be mentioned that from the assessment years 1957-58 to 1971-72, it was one of the conditions for claiming exemption under section 5(1)(iv) that the house should be exclusively, used by the assessee for residential purpose. This condition was abrogated from 1972-73 by the Finance (No. 2) Act, 1971. However, this will only mean that after 1972 even if the assessee lets out his house on rent for residential or commercial purpose, or himself uses it for commercial purpose he will still get the exemption.
A cinema hall is not a building for human habitation or a dwelling or a home. Hence a cinema hall is not a house at all. To get exemption it must be a house in the first place, which a cinema hall is not. Hence, in our opinion, the assessee cannot get exemption under section 5(1)(iv).
9. For the reasons given above the reference is answered in the negative, i.e., in favour of the department and against the assessee,