COMMISSIONER OF WEALTH TAX vs. HUF OF VIKRAM A SARABHAI

WTR/2/1984HC GujaratGJHC24012150198406 February 1997Author: HONOURABLE MR. JUSTICE R.K.ABICHANDANI,HONOURABLE MR. JUSTICE R.BALIA2 pages
AI SummaryAllowed

What were the facts?

This case involves a reference to the High Court of Gujarat by the Income Tax Appellate Tribunal (ITAT), Ahmedabad, concerning Wealth Tax Reference No. 2 of 1984. The reference arises from an order passed by the Commissioner of Wealth Tax (CWT) under Section 25(2) of the Wealth Tax Act, 1957. The ITAT had previously set aside the CWT's order. The CWT, as the petitioner, is challenging the ITAT's decision. The respondent is the HUF of Vikram A. Sarabhai. The ITAT's decision was based on its prior ruling in WTA No. 227/AHD/80, which involved identical facts and issues. A reference from that earlier decision (Reference No. 37/82) had been disposed of by the High Court.

What did the High Court hold?

The High Court held that the Income Tax Appellate Tribunal (ITAT) was correct in law in setting aside the order passed by the Commissioner of Wealth Tax under Section 25(2) of the Wealth Tax Act, 1957. The Court followed its own decision in CWT Vs. Amichand C. Shah (H.U.F), reported in 218 ITR 659. In that precedent, the High Court had upheld the Tribunal's finding that a valuation report, which was not part of the record before the Wealth Tax Officer (WTO), could not be taken into consideration by the Commissioner for the purpose of invoking jurisdiction under Section 25(2) of the Act. Therefore, the Tribunal's conclusion that the Commissioner's order was liable to be set aside was affirmed. The question referred to the High Court was answered in the affirmative, meaning the Tribunal's decision was upheld. The operative direction is that the reference stands disposed of with no order as to costs.

What were the issues?

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 order passed by the Commissioner of Wealth Tax, under Section 25(2) of the Wealth Tax Act, 1957 was liable to be set aside? Assessee's Contention: The ITAT held that the order passed by the Commissioner of Wealth Tax under Section 25(2) was liable to be set aside. This conclusion was based on the ITAT's prior decision in WTA No. 227/AHD/80, where it was held that a valuation report not forming part of the record before the Wealth Tax Officer (WTO) could not be considered by the Commissioner for invoking jurisdiction under Section 25(2). Revenue's Contention: The revenue, represented by the Commissioner of Wealth Tax, is challenging the ITAT's decision. The judgment does not explicitly record the revenue's specific arguments but implies they are contesting the ITAT's finding that the Commissioner's order was wrongly set aside. The revenue relies on the High Court's decision in CWT Vs. Amichand C. Shah (H.U.F) for their position.

Which sections of the Income-tax Act were involved?

Section 25(2),Section 27(1)

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

WEALTH TAX REFERENCE No 2 of 1984

For Approval and Signature:

Hon'ble MR.JUSTICE R.K.ABICHANDANI and MR.JUSTICE R.BALIA. ============================================================ 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?

-

The order continues below.

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