COMMISSIONER OF WEALTH TAX vs. USTUK ALKESH TRUST

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WTR/61/1996HC GujaratGJHC24021991199629 January 1998Author: HONOURABLE MR. JUSTICE R.K.ABICHANDANI,HONOURABLE MR. JUSTICE ANIL R. DAVE2 pages
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What did the High Court hold?

The High Court of Gujarat, following its decision in Wealth Tax Reference No. 43/93, answered the referred question in the affirmative, in favour of the assessee and against the Revenue. The reasoning, as indicated by the reference to the prior judgment, likely pertains to the principle that wealth tax should not be levied at the normal rate if the net wealth disclosed falls below the taxable limit. The Tribunal's direction to the Assessing Officer to levy tax at the normal rate in such a scenario was deemed incorrect. The reference stands disposed of accordingly, with no order as to costs. The operative direction is to answer the question in favour of the assessee.

What were the facts?

This case involves a reference made by the Income Tax Appellate Tribunal (ITAT), Ahmedabad, to the High Court of Gujarat for its opinion on a question of law. The reference pertains to the Wealth Tax Act, 1957. The Commissioner of Wealth Tax is the petitioner, and Ustuk Alkesh Trust is the respondent. The specific facts leading to the reference are not detailed in this judgment, as the court notes that they are similar to another case, Wealth Tax Reference No. 43/93, decided on the same day. The core of the dispute revolves around the levy of wealth tax when the net wealth disclosed by the assessee was below the taxable limit.

What were the issues?

1. Whether the Appellate Tribunal is right in law and on facts in directing the Assessing Officer to levy tax at the normal rate when the net wealth disclosed was below the taxable limit? (Question of law and fact, concerning the interpretation and application of the Wealth Tax Act, 1957). Assessee's contention: Not recorded in the judgment. Revenue's contention: Not recorded in the judgment. The judgment states that the question is similar to Wealth Tax Reference No. 43/93, and the decision is based on the reasoning provided in that earlier judgment.

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 No 61 of 1996

For Approval and Signature:

Hon'ble MR.JUSTICE R.K.ABICHANDANI and MR.JUSTICE A.R.DAVE ============================================================ 1. Whether Reporters of Local Papers may be allowed to see the judgements?

2.

To be referred to the Reporter or not?

3.

Whether Their Lordships wish to see the fair copy of the judgement?

4.

Whether this case involves a substantial question 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?

-------------------------------------------------------------- COMMISSIONER OF WEALTH TAX Versus USTUK ALKESH TRUST --------------------------------------------------------------

Appearance: MR P.G. DESAI with MR MANISH R BHATT for Petitioner Respondent served

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

CORAM : MR.JUSTICE R.K.ABICHANDANI and MR.JUSTICE A.R.DAVE Date of decision: 29/01/98

ORAL JUDGEMENT (Per R.K.Abichandani,J.)

The Income Tax Appellate Tribunal, Ahmedabad has referred for the opinion of this Court the following question under Section 27(1) of the Wealth Tax Act, 1957. "Whether the Appellate Tribunal is right in law and on facts in directing the Assessing Officer to levy tax at the normal rate when the net wealth disclosed was below the taxable limit?"

A similar question has been answered by us today in Wealth Tax Reference No. 43/93. Since the facts are similar and the question involved almost identical, we do not find it necessary to reproduce the facts of this case. For the reasons given by us in our judgement and order delivered in Wealth Tax Reference No. 43/93 today, we answer the question referred to us in the affirmative in favour of the assessee and against the Revenue. The reference stands disposed of accordingly with no order as to costs.

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*/Mohandas

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