COMMISSIONER OF WEALTH TAX vs. JAYKRISHNA HARIVALLBHDAS HUF

PDF · subscribers
WTR/7/1984HC GujaratGJHC24012155198411 July 2001Author: HONOURABLE MR. JUSTICE ANIL R. DAVE,HONOURABLE MR. JUSTICE D.A.MEHTA4 pages
AI SummaryPartly Allowed

What did the High Court hold?

The High Court addressed each question based on the facts and circumstances presented and the legal precedents. For the question concerning the valuation of shares in companies by applying Rule 1-D of the Wealth-tax Act, considering the excess of provision for taxation over the tax payable as per books without adjusting advance tax paid (Questions 1, 3, 4(2), and 5), the Court answered in the negative, in favour of the revenue and against the assessee. This decision was based on the law laid down by the Supreme Court in the case of Bharat Hari Singhania and others vs. Commissioner of Wealth-Tax and others, 207 I.T.R.1. Regarding the question of whether Wadaj lands were agricultural lands and not liable to wealth-tax (Question 2), the Court declined to answer. The reason provided was the lack of relevant facts and details on record to arrive at a conclusion. For the question concerning the deduction of amounts borrowed from H.K.(Estate) (Question 4(1)), the Court also declined to answer, stating that no material was found on record to answer the question. All references were disposed of accordingly, with no order as to costs.

What were the facts?

The Commissioner of Wealth Tax filed several references before the High Court of Gujarat at Ahmedabad concerning various assessment years from 1969-70 to 1975-76. These references arose from orders passed by the Income-tax Appellate Tribunal, Ahmedabad Bench. The references sought the court's opinion on questions of law related to the valuation of shares in companies and the classification of certain lands as agricultural. The assessee is Jaykrishna Harivallbhdas HUF, and the revenue is the Commissioner of Wealth Tax. The High Court directed that each reference be given a separate number. Mr. Akil Qureshi appeared for the revenue, while no one appeared for the respondent assessee.

What were the issues?

The High Court was asked to decide several questions of law, framed as follows: 1. (Reference No. 7, AY 1969-70) Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in concluding that shares in companies should be valued by applying Rule 1-D of the Wealth-tax Act, considering the excess of provision for taxation over the tax payable as per books without adjusting advance tax paid? 2. (Reference No. 7, AY 1969-70) Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in concluding that the Wadaj lands owned by the assessee were agricultural lands and not liable to wealth-tax? 3. (Reference No. 7A, AY 1970-71) Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in concluding that shares in companies should be valued applying Rule 1-D of the Wealth-tax Act, considering the excess of provision for taxation over the tax payable as per books without adjusting advance tax paid? 4. (Reference Nos. 7B-7D, AYs 1971-72 to 1973-74) (1) Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in concluding that the assessee was entitled to deduction of amounts borrowed from H.K.(Estate)? (2) Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in concluding that shares in companies should be valued applying Rule 1-D of the Wealth-tax Act, considering the excess of provision for taxation over the tax payable as per books without adjusting advance tax paid? 5. (Reference Nos. 7E-7F, AYs 1974-75 & 1975-76) Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in concluding that shares in companies should be valued applying Rule 1-D of the Wealth-tax Act, considering the excess of provision for taxation over the tax payable as per books without adjusting advance tax paid? Assessee's arguments were not recorded. The revenue contended that the Tribunal erred in its conclusions on the valuation of shares and the classification of lands. The revenue relied on the Supreme Court judgment in Bharat Hari Singhania and others vs. Commissioner of Wealth-Tax and others, 207 I.T.R.1.

Which sections of the Income-tax Act were involved?

Section 27(1)

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

WEALTH TAX REFERENCE Nos. 7, 7A, 7B, 7C, 7D, 7E & 7F of 1984

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 --------------------------------------------------------------

COMMISSIONER OF WEALTH TAX Versus JAYKRISHNA HARIVALLBHDAS HUF -------------------------------------------------------------- Appearance: MR AKIL QURESHI FOR MR MANISH R BHATT for Applicant. NOTICE SERVED for Respondent No. 1

--------------------------------------------------------------

CORAM : MR.JUSTICE A.R.DAVE and MR.JUSTICE D.A.MEHTA

Date of decision: 11/07/2001

COMMON JUDGEMENT (Per : MR.JUSTICE A.R.DAVE)

1 For different assessment years the Income-tax Appellate Tribunal, Ahmedabad Bench, 'B' has referred to this Court for its opinion the following questions of law under the provisions of Section 27(1) of the Wealth Tax Act,1957. 2 Looking to the fact that the questions have been referred to this Court for different assessment years, in our opinion, it would be just and proper to give them separate Reference numbers. The Registry is therefore directed to give separate Reference numbers after Refence No. 7, as Reference Nos. 7A, 7B, 7C, 7D, 7E and 7F.

3 Learned Advocate Mr.Akil Qureshi has appeared for the revenue whereas nobody has appeared for the respondent.

Reference No.7 of 1984. Assessment Year 1969-70

"(1) Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in coming to the conclusion that the share in companies should be valued by applying rule 1-D of the Wealth-tax Act considering the excess of provision of taxation over the tax payable as per books without adjusting the advance tax paid?

(2) Whether, on the facts and in the circumstances of the case the Tribunal was right in law in coming to the conclusion that the Wadaj lands owned by the assessee were agricultural lands andnot liable to wealth-tax ?"

So far as the first question is concerned, it has been answered in the case of Bharat Hari Singhania and others vs. Commissioner of Wealth-Tax and others, 207 I.T.R.1 by the Hon'ble Supreme Court. Looking to the law laid down in the said case we answer the question in the negative i.e. in favour of the revenue and against the assessee.

So far as the second question is concerned we decline to answer the same as relevant facts and details are not available on record to come to the conclusion whether the lands in question were agriculture lands or otherwise.

Reference No.7A of 1984. Assessment Year 1970-71. "Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in coming to the conclusion that the shares in companies should be valued applying rule 1-D of the Wealth-tax Act considering the excess of provision of taxation over the tax payable as per books without adjusting the advance tax paid?"

So far as the above question is concerned, as stated hereinabove, the said question has already been answered in the case of Bharat Hari Singhania and Others Vs. Commissioner of Wealth-Tax and others, 207 I.T.R.1 and in view of the law laid down in the said judgment we answer the question in the negative i.e. in favour of the revenue and against the assessee.

Reference Nos. 7B, 7C, & 7D. Assessment Years 1971-72, 1972-73 and 1973-74. "(1) Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in coming to the conclusion that the assessee was entitled to deduction of amounts borrowed from H.K.(Estate) ?

(2) Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in coming to the conclusion that the shares in companies should be valued applying Rule 1-D of the Wealth tax Act considering the excess of provision of taxation over the tax payable as per books without adjusting the advance tax paid?"

So far as the first question is concerned, upon perusal of the record, we are unable to find any material to answer the question, and therefore, we decline to answer the question No.

1.

So far as question No.2 is concerned, we answer the same in the negative i.e. in favour of the revenue and against the assessee in view of the judgment delivered in the case of Bharat Hari Singhania and others vs. Commissioner of Wealth-Tax and others, 207 I.T.R.

1.

Reference Nos. 7E & 7F. Assessment Years 1974-75 and 1975-76. "Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in coming to the conclusion that the shares in companies should be valued applying Rule 1'D of the Wealth-tax Act considering the excess of provision of taxation over the tax payable as per books without adjusting the advance tax paid?"

The above question will also have to be answered in the affirmative i.e. in favour of the revenue and against the assessee in view of the judgment delivered in the case of Bharat Hari Singhania and others vs. Commissioner of Wealth-Tax and others, 207 I.T.R.

1.

All the aforesaid References stand disposed of accordingly with no order as to costs. (A.R.Dave, J) (D.A.Mehta, J) m.m.bhatt

More judgments on Section 27(1)

All 322 judgments and leading authorities on Section 27(1) →

Recent GST High Court judgments

Search GST case law →