COMMISSIONER OF WEALTH TAX, HR., ROHTAK vs. KAMAL SAROJ

WTR/5/2006HC Punjab & HaryanaPHHC01085289200630 March 2010Author: MR. JUSTICE M.S. SULLAR,MR. JUSTICE ASHUTOSH MOHUNTA2 pages
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What were the facts?

The assessee, Smt. Kamal Saroj, was a partner in the firm M/s Mahajan Overseas. The firm had claimed cash incentives from the Central Government through the Export Promotion Council for promoting handloom exports. The Wealth Tax Officer included the assessee's share of this incentive in her net wealth. The Appellate Assistant Commissioner ordered the exclusion of this amount. The Income Tax Appellate Tribunal dismissed the revenue's appeal. The revenue's application for referring the matter to the High Court was dismissed by the Tribunal. The revenue filed a reference application before the High Court of Punjab and Haryana challenging the Tribunal's order.

What did the High Court hold?

The High Court held that the assessee's share in the cash incentive and duty drawback did not represent any assets. The court reasoned that the incentive was a personal reward for promoting handloom exports given by the Handloom Export Promotion Council. Such remittances do not fall within the definition of movable or immovable property and cannot be termed as assets under Section 2(e) of the Wealth Tax Act in the given circumstances. 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.97,585/- due to the firm M/s Mahajan Overseas, Panipat from the Central Government Handloom Export Promotion Council was not liable to wealth tax? Assessee's contention: The judgment does not record any specific arguments made by the assessee. Revenue's contention: The revenue argued that the assessee's share in the cash incentive should be included in her net wealth for wealth tax purposes. The revenue was aggrieved by the Tribunal's order dismissing its appeal and the subsequent dismissal of its application for referring the matter to the High Court.

Which sections of the Income-tax Act were involved?

Section 2(e)

AI-generated summary — verify with the full judgment below

WTR No.5 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 Smt.Kamal Saroj, Mahajan House, 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 Appellate Assistant Commissioner of Income Tax ordered the exclusion of the aforesaid amoun

The order continues below.

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