COMMISSIONER OF WEALTH TAX vs. TARUN KALINDI TRUST

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WTR/50/1996HC GujaratGJHC24021980199629 January 1998Author: HONOURABLE MR. JUSTICE R.K.ABICHANDANI,HONOURABLE MR. JUSTICE ANIL R. DAVE2 pages
AI SummaryAllowed

What did the High Court hold?

The High Court of Gujarat answered the referred question in the affirmative, in favour of the assessee and against the Revenue. The reasoning is based on the judgment and order delivered in a similar case, Wealth Tax Reference No. 43/93. Although the specific reasoning for Wealth Tax Reference No. 43/93 is not reproduced here, the outcome implies that the Tribunal's direction to levy tax at the normal rate when net wealth was below the taxable limit was considered correct. The principle established is that wealth tax should not be levied if the disclosed net wealth falls below the taxable threshold, and any direction to the contrary by the Assessing Officer would be incorrect. The reference stands disposed of accordingly.

What were the facts?

The Commissioner of Wealth Tax has referred a question of law to the High Court of Gujarat at Ahmedabad under Section 27(1) of the Wealth Tax Act, 1957. The reference concerns an order passed by the Income Tax Appellate Tribunal, Ahmedabad. The material facts are stated to be similar to those in Wealth Tax Reference No. 43/93, which was decided concurrently. The assessee is Tarun Kalindi Trust, and the revenue is the Commissioner of Wealth Tax. The assessment year(s) are not specified. The dispute revolves around the levy of wealth tax when the net wealth disclosed 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 levy of wealth tax under the Wealth Tax Act, 1957). Assessee's contentions: Not recorded in the judgment. Revenue's contentions: Not recorded in the judgment. The judgment states that the question is similar to one decided in Wealth Tax Reference No. 43/93, and for the reasons given in that case, the question is answered. Therefore, specific arguments for this reference are not detailed.

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 50 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 TARUN KALINDI 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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