COMMISSIONER OF WEALTH-TAX vs. MANUBHAI BHIKABHAI

WTR/49/1986HC GujaratGJHC24011007198624 July 2001Author: HONOURABLE MR. JUSTICE ANIL R. DAVE,HONOURABLE MR. JUSTICE D.A.MEHTA3 pages
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What did the High Court hold?

The High Court answered the first question in the affirmative, in favour of the assessee and against the Revenue. The reasoning was based on the established law laid down by the High Court itself in CWT v. Shri Niranjan Narottam and subsequently approved by the Supreme Court in CWT v. Sharvan Kumar Swarup & Ors. These precedents clearly indicated that Section 7(4) of the Wealth-tax Act, 1957, was not applicable for the assessment year 1974-75 as it came into effect from 1.4.1976. Therefore, the Tribunal was justified in confirming the AAC's order on this point. Regarding the second question, the Court declined to answer it. The reason was the incomplete information provided and the inability of the Revenue's advocate to confirm whether the Tribunal's decision in Nootan C. Parikh had been approved by the High Court. The Court stated it did not have the relevant facts to answer the question. The reference was disposed of accordingly.

What were the facts?

This is a Wealth Tax Reference No. 49 of 1986 before the High Court of Gujarat at Ahmedabad, concerning assessment year 1974-75. The Commissioner of Wealth-tax (Revenue) has referred two questions for the court's opinion at the instance of the Revenue. The assessee is Manubhai Bhikabhai. The Income Tax Appellate Tribunal, Ahmedabad Bench 'C', had confirmed an order of the Additional Commissioner of Wealth-tax (AAC). The Revenue's advocate appeared, but the assessee, though served, did not appear. The court is deciding the reference based on submissions and existing case law.

What were the issues?

The Tribunal had to decide two questions referred by the Revenue: 1. Whether, on the facts and in the circumstances of the case, the Tribunal was justified in confirming the order of the AAC to the effect that Section 7(4) of the Wealth-tax Act, 1957, was applicable in the valuation of self-occupied property, when the assessment year is 1974-75 and Section 7(4) came into operation w.e.f. 1.4.1976? 2. Whether, on the facts and in the circumstances of the case, the Tribunal was justified in confirming the order of the AAC to the effect that the reversionary value of the land cannot be taken into account for the purpose of valuation of rented property? Contentions: Revenue: For the first question, the Revenue's advocate fairly submitted that this Court had already answered this question in the case of CWT v. Shri Niranjan Narottam, 173 ITR 693, which was subsequently approved by the Supreme Court in CWT v. Sharvan Kumar Swarup & Ors., 210 ITR 886. The Revenue conceded that the first question should be answered in favour of the assessee. For the second question, the Revenue's advocate stated that the Tribunal had relied on its own decision in Nootan C. Parikh (W.T.A. No. 855 to 859/Ahd/83 decided on 4.11.1985). The Revenue could not ascertain if this Tribunal's decision had been approved by the High Court.

Which sections of the Income-tax Act were involved?

Section 27(1),Section 7(4)

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

WEALTH TAX REFERENCE No 49 of 1986

For Approval and Signature:

Hon'ble MR.JUSTICE A.R.DAVE and Hon'ble MR.JUSTICE D.A.MEHTA

============================================================ 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 Civil Judge? : NO

The order continues below.

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