TMI Blog1980 (10) TMI 38X X X X Extracts X X X X X X X X Extracts X X X X ..... s court : " Whether, on the facts and in the circumstances of the case, and also under the relevant provisions of law, the Tribunal is correct in law in holding that 60% of the face value of the suits filed account should be allowed as a deduction in computing the net wealth of the assessee ? " The assessee-an HUF-has been carrying on the business of money-lending and also conducting chitties. For recovery of amounts due from the debtors, the assessee had to file a large number of suits in courts and the details concerning those suits are entered by the assessee in what is called " suits filed account ". Admittedly, in the said suits filed account there were a large number of instances where the suits had already matured into decrees pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... led to the Tribunal reiterating its contention that only 40 per cent. of the face value of the debts shown in the suits filed account ought to have been taken as the value of the assets for the purpose of assessment. The Tribunal took note of the fact that all the suits were for recovery of unsecured debts and that in three instances the litigations have been shown to have been carried to the High Court thereby clearly implying that complicated questions were involved which, according to the Tribunal, justified the inference that the litigation was of " complicated, difficult and protracted nature " and there was stubborn and stiff resistance offered by the debtors. The Tribunal also took note of the fact that during the relevant periods th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y it on September 30, 1974, in the nine appeals relating to the years 1963-64 to 1971-72 in respect of the same assessee. Under s. 7(1) of the Act, the value of any asset is to be fixed for the purpose of assessment under the Act by estimating the price which it would, in the opinion of the WTO, fetch if sold in the open market on the valuation date. Our attention has not been drawn to any rule framed under the Act which specifically deals with the question of valuation of book debts. Hence the aforesaid principle of determining the value of the assets with reference to the value that it would reasonably fetch in the open market has to be applied in respect of book debts also. Unfortunately, no attempt has been made by the WTO, the AAC or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has pointed out that for the purpose of the E.D. Act as well as the W.T. Act, the duty of the assessing authority is to estimate the value of asset in question at the price which it would fetch it sold in the open market at the relevant valuation date. Unfortunately, in this case, the approach made by the Tribunal cannot be regarded as consistent with the aforesaid legal position. No endeavour has been made by the Tribunal either by itself or by remitting the matter to the assessing authority to have the market value of the asset as on the valuation date determined on any scientific or reasonable basis. We are unable to uphold as correct the procedure adopted by the Tribunal of applying a flat deduction of 60 per cent. of the face value of ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
