COMMISSIONER OF WEALTH TAX HRY vs. KAMAL SAROJ PANIPAT

WTR/17/2006HC Punjab & HaryanaPHHC01085285200630 March 2010Author: MR. JUSTICE M.S. SULLAR,MR. JUSTICE ASHUTOSH MOHUNTA2 pages
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What were the facts?

The assessee was a partner in the firm M/s Mahajan Overseas, which received cash incentives from the Central Government's Handloom Export Promotion Council. The Wealth Tax Officer included the assessee's share of this incentive in her net wealth. The Commissioner of Wealth Tax ordered its exclusion. The revenue appealed to the Income Tax Appellate Tribunal (ITAT), which dismissed the appeal. The Tribunal also dismissed the revenue's application for a reference to the High Court. The revenue then filed a reference application to the High Court of Punjab and Haryana, challenging the Tribunal's order.

What did the High Court hold?

The High Court held that the cash incentive and duty drawback did not represent any assets. The Court reasoned that the indicated amount of incentive was a personal reward for the promotion of export handloom given by the Handloom Export Promotion Council. Such remittances do not fall within the purview of movable or immovable property and cannot be termed as assets as defined under Section 2(e) of the Wealth Tax Act. Therefore, the question of law was answered in favour of the assessee and against the revenue. The reference was disposed of accordingly.

What were the issues?

1. Whether, on the facts and circumstances of the case, the Tribunal was right in law in holding that the assessee's share in cash incentive amounting to Rs. 1,16,102/- due to the firm M/s Mahajan Overseas, Panipat from the Central Government Handloom Export Promotion Council was not liable to wealth tax? The assessee contended that the cash incentive and duty drawback did not represent any assets as defined under the Wealth Tax Act, as it was a personal reward for export promotion and did not fall within the purview of movable or immovable property. The revenue argued that the assessee's share in the cash incentive was includible in her net wealth.

Which sections of the Income-tax Act were involved?

Section 2(e)

AI-generated summary — verify with the full judgment below

WTR No.17 of 2006 1 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH.

Date of Decision:-30.3.2010 The Commissioner of Wealth-tax, Haryana, Rohtak ...Petitioner Versus Kamal Saroj c/o M/s Mahajan, Overseas, Panipat ...Respondent CORAM: HON'BLE MR.JUSTICE ASHUTOSH MOHUNTA HON'BLE MR.JUSTICE MEHINDER SINGH SULLAR Present:- Mr.Krishan Mehta, Sr.Standing Counsel for the petitioner.

Mr.Sanjay Bansal, Senior Advocate with Ms.Shaveta Malhotra & Ms.Harpreet Kaur, Advocates for the respondent.

Ashutosh Mohunta, J. (Oral)

The brief facts, relevant for disposal of present case and emanating from the record are that the assessee was a partner in the firm M/s Mahajan Overseas, which had made certain claims of cash incentive to the Central Government in the matter of Export Promotion Council. The Wealth Tax Officer included the amount equal to the assessee's share as her net wealth. However, the Commissioner of Wealth Tax ordered the exclusion of the aforesaid amount, vide order dated 10.

The order continues below.

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