COMMISSIONER OF WEALTH TAX vs. KASTURBHAI MAYABHAI

WTR/36/1983HC GujaratGJHC24012001198329 January 1997Author: HONOURABLE MR. JUSTICE R.K.ABICHANDANI,HONOURABLE MR. JUSTICE R.BALIA6 pages

AI SummaryDismissed

What were the facts?

The Commissioner of Wealth Tax filed a reference application before the High Court of Gujarat concerning assessment years 1968-69, 1971-72, 1972-73, and 1975-76. The assessee, Kasturbhai Mayabhai, claimed to have inherited properties from his natural father Manibhai and adoptive father Mayabhai. He claimed HUF status for properties inherited from Mayabhai (7 annas share) and individual status for properties inherited from Manibhai (9 annas share). The Wealth Tax Officer assessed all properties in the assessee's individual capacity and also framed a protective assessment in the hands of the HUF. The Appellate Assistant Commissioner and the Tribunal set aside the protective assessment. The High Court, in a previous reference (Income Tax Reference No. 344 of 1982), had held that properties inherited from Mayabhai should be assessed in the hands of the HUF.

What did the High Court hold?

The High Court reframed the question to be considered as suggested by the Commissioner: '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 of assessment made by the wealth-tax officer on a protective basis was liable to be cancelled?'. The Court held that the protective assessment becomes effective only if the main assessment order is not sustained. The fate of a protective assessment depends on the ultimate decision in the main order, and both assessments cannot operate simultaneously to result in double taxation. The Court noted that the main assessment order in the individual status concerning the 7 annas share inherited from Mayabhai was found unsustainable in light of previous High Court decisions. Therefore, the protective assessment order should become operative. The Court answered the reframed question in the negative, in favour of the revenue and against the assessee, meaning the protective assessment was not liable to be cancelled.

What were the issues?

1. Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the assessee HUF did not have a 7 annas share in the immovable and movable properties in the assessment years 1968-69, 1971-72, 1972-73, and 1975-76, and thereby cancelling the protective assessment? (Question framed by the Tribunal, reframed by the Court). The Revenue argued that the question framed by the Tribunal was not arising from its order and that the question should be whether the protective assessment was liable to be cancelled. The assessee's contention is not recorded. 2. Whether the order of assessment made by the Wealth-tax Officer on a protective basis was liable to be cancelled? (Question suggested by the Commissioner). The Revenue's contention is that the protective assessment should not have been cancelled. The assessee's contention is not recorded.

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

WEALTH TAX REFERENCE No 36 of 1983

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?

To be referred to the Reporter or not?

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

Whether this case involves a substantial question of law as to the interpretation of the Constitution of India, 1950 of any Order made thereunder?

Whether it is to be circulated to the Civil Judge?

The order continues below.

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