COMMISSIONER OF WEALTH-TAX vs. VIJAYKUNVERBA

WTR/80/1991HC GujaratGJHC24013742199114 July 2003Author: HONOURABLE MR. JUSTICE ANIL R. DAVE,HONOURABLE MR. JUSTICE A.M.KAPADIA5 pages
AI SummaryDismissed

What were the facts?

The Revenue has filed a reference before the High Court of Gujarat challenging an order of the Income-Tax Appellate Tribunal (ITAT). The dispute pertains to the assessment year 1974-75. The assessee had not included a lease rent of Rs. 4,000/- and an income-tax refund of Rs. 29,511/- in her wealth return. The Commissioner of Wealth-tax, exercising powers under Section 25(2) of the Wealth-tax Act, 1957, directed the Wealth-tax Officer to include these amounts in the assessee's net wealth, considering them due and payable on the valuation date. The assessee appealed to the ITAT, arguing that as she maintained accounts on a cash basis, amounts not yet received could not be included. The ITAT allowed the appeal, leading to this reference by the Revenue.

What did the High Court hold?

The High Court held that the system of accounting adopted by the assessee is irrelevant for determining assets for wealth-tax purposes. Citing the Supreme Court judgments in Commissioner of Wealth-tax, Orissa v. Vysyaraju Badreenarayana Moorthy Raju, 152 ITR 454, and Henry Joshua Silverston v. Commissioner of Wealth-tax, 192 ITR 296, the Court stated that all assets, barring those expressly excepted by statute, are to be taken into account. The definition of 'assets' under Section 2(e) of the Act includes property of every description, movable or immovable, and any debt owed to the assessee is a property. Therefore, the amounts of lease rent and income-tax refund were rightly considered assets. The Court concluded that the Commissioner of Wealth-tax was correct in directing their inclusion in the net wealth. The question of law was answered in the negative, against the assessee and in favour of the Revenue. The reference was disposed of.

What were the issues?

1. Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in setting aside the order of the Commissioner of Wealth-tax so far as it related to the refund amount of Rs. 29,511/- and lease rent Rs. 4000/-? (Question of law) Assessee's Contention: The assessee contended that since she maintained her books of accounts on a cash basis, amounts that had not been received could not be included in her wealth. The assessee relied on the judgment in Commissioner of Wealth-tax, Bihar and Orissa v. Vysyaraju Badreenarayanamoorthy Raju, 79 ITR 330. Revenue's Contention: The Revenue argued that the income-tax refund and lease rent were assets of the assessee and rightly directed to be included in net wealth by the Commissioner under Section 25(2). The Revenue relied on the judgment in Dipti Kumar Basu v. Commissioner of Wealth-tax, West Bengal, 105 ITR 450. Subsequently, the Revenue pointed out that the Supreme Court had overruled the Vysyaraju Badreenarayanamoorthy Raju case and approved the view in Dipti Kumar Basu.

Which sections of the Income-tax Act were involved?

Section 27(1),Section 25(2),Section 2(e)

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

WEALTH TAX REFERENCE No 80 of 1991

For Approval and Signature:

Hon'ble MR.JUSTICE A.R.DAVE and Hon'ble MR.JUSTICE A.M.KAPADIA

============================================================ 1. Whether Reporters of Local Papers may be allowed : NO to see the judgements?

2.

To be referred to the Reporter or not? : NO 3. Whether Their Lordships wish to see the fair copy : NO of the judgement?

4.

Whether this case involves a substantial question : NO of law as to the interpretation of the Constitution of India, 1950 of any Order made thereunder?

5.

Whether it is to be circulated to the concerned : NO Magistrat

The order continues below.

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