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Wealth-tax - Case Laws
Showing 161 to 180 of 3697 Records
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2017 (11) TMI 811 - ITAT KOLKATA
Inclusion of cash on hand of the proprietor business of the assessee to the net wealth of the assessee - Held that:- Cash in hand referred to in Section 2(ea)(vi) of the Act represents only the personal cash of the assessee emanating from his personal balance sheet. It nowhere contemplated the inclusion of cash which is held as business asset. If it is so held, then the purpose of valuation method prescribed in Schedule III Rule 14 of the Rule would become redundant. Admittedly, the cash in hand of ₹ 48,81,761/- represents the cash belonging to the business of the assessee and thereby partakes the character of a business asset.
In view of all, we have no hesitation in directing the Ld. AO to delete the addition made in the sum of ₹ 48,81,761/- from the value of net wealth representing business cash. Accordingly, the grounds 1 to 4 raised by the assessee are allowed.
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2017 (11) TMI 249 - ITAT JAIPUR
Addition in return wealth of the assessee by treating unapproved/agriculture plots/lands as taxable assets - Held that:- The asset is exempt in view of the provisions of Section 2(ea)(iv) of Wealth tax Act. As on this land the construction is not permissible. Secondly, the assessee has disputed the valuation adopted by the Assessing Officer. We have given our thoughtful consideration to the contention of the assessee. We find that the Assessing Officer has not made any enquiry from the concerned authorities i.e. Jaipur Development Authority whether the construction of building is permissible on the land further no effort is made as to ascertain what is the fair market value of the assets.
Under these facts, we therefore set aside the order of the authorities below and restore this issue to the file of the Assessing Officer to decide afresh. The AO would make enquiry in respect of the claim of the assessee that no building is permissible on the land and also would refer the issue of valuation of the cost of assets to the DVO to ascertain the fair market value for the purpose of computing the wealth tax, if he is not satisfied qua the claim of the assessee that asset is exempt. Hence, Ground no. 1, is allowed for statistical purpose.
Non-allowing deduction of debts - Held that:- This Tribunal in assessee’s own case pertaining to the Assessment Year 2006-07 held as no material on record to support the contentions raised by the ld AR which satisfies the above requirement of establishing the necessary nexus between the debt and the assets in question. Since we have set-aside the matter relating to determination of pieces of land/plot as eligible to wealth tax and the applicability of the exclusion clause, this issue is also set-aside to the file of the AO to examine the same afresh as per law
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2017 (11) TMI 241 - ITAT DELHI
Initiation of reassessment proceedings under section 17 of the Wealth Tax Act - non supply of reasons to believe - Held that:- Copy of the reasons for reopening of the assessment under Wealth Tax have not been supplied to the assessee within the period of limitation. The submissions of the assessee made before the A.O. and Ld. CWT(A) have not been rebutted by the department through any evidence or material on record. It, therefore, stands proved that the copy of the reasons for reopening of the assessment under Wealth Tax Act have not been supplied to the assessee within time. Therefore, the re-assessment is liable to be quashed - Decided in favour of assessee.
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2017 (11) TMI 237 - ITAT BANGALORE
Additions of cash in hand held and recorded in regular books of accounts and shown in the business balance sheet of the appellant - meaning of assets as defined in Section 2(ea) of the Wealth Tax Act - Held that:- Having carefully examined the orders of lower authorities in the light of rival submissions, we find that the assessee is an individual and filed its return of income in the capacity of individual, though he has been doing his own business. Provisions of section 2(ea)(vi) of the Act clearly states that cash in hand in excess of ₹ 50,000 of individuals & HUF is an asset and in the case of others, any amount not recorded in the books of account is an asset.
Provision in the Act which says that cash in hand recorded in the books of account of individual’s business is not an asset. In the Act, a classification is made between the individual, HUF and other persons. Admittedly, the assessee is an individual, therefore, the provisions laid down for an individual would apply. According to the provisions of section 2(ea)(vi) of the Act, any cash in hand in excess of ₹ 50,000 is an asset. It is irrelevant whether the individual is doing business or not. The argument of the assessee that cash in hand is recorded in the books of account of the business of assessee is a productive asset, therefore it cannot be chargeable to wealth-tax, has been examined by the Hon’ble Kerala High Court in the case of CWT v. Smt K.R. Ushasree (2009 (7) TMI 834 - Kerala High Court) in which held that there is nothing that stops the assessee from utilizing the cash in hand which may be the business asset on the valuation date for any non-productive purpose on the next day. Therefore the argument of assessee that cash in hand of businessmen should be treated as productive asset also is meaningless. - Decided against assessee.
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2017 (11) TMI 227 - ITAT AHMEDABAD
Chargeability of wealth-tax on certain parcels of land - whether parcels of land being agricultural land are excluded from definition of ‘Urban Land’ given under s.2(ea) of the Wealth Tax Act, 1957? - Held that:- We notice from the purchase-deed dated 09/09/2005 with reference to agricultural land at Suratas referred to at the course of hearing on behalf of the assessee that aforesaid agricultural land was held as agricultural land and cultivated for agricultural purposes. Likewise, reference was made to the purchasedeed dated 23/10/2008 for acquisition of the land at Vadaj in the course of hearing. From specific assertions in the sale-deed, we note that the aforesaid land was claimed to be acquired as agricultural land. However, it is not clear whether the aforesaid land was actually used for agricultural purposes as contemplated in the definition of ‘Urban Land’. The assessee shall be entitled to relief subject to production of evidence towards agricultural use of the aforesaid land at Vadaj to the satisfaction of the AO. For this limited purpose, the matter is remanded back to the file of AO for necessary verification.
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2017 (11) TMI 221 - ITAT PUNE
Maintainability of appeal filed by the Revenue on account of tax effect - Held that:- The present appeal filed by the Revenue is not maintainable, hence the same is dismissed for low tax effect. We are not adjudicating the issue on merits in this regard. The grounds of appeal raised by the Revenue are thus, dismissed.
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2017 (11) TMI 217 - ITAT JAIPUR
Addition treating unapproved/agriculture plots/lands as taxable assets - whether the assessee’s having various pieces of land/plots falls under the exclusion clause of section 2(ea)(v) read with explanation (b) so as to not fall within the definition of urban land which is otherwise exigible for wealth tax? - Held that:- We are presently not going into the debate of prohibition vs permission for carrying out construction on these assets as sought by both the parties and various decisions cited in support thereof. There are number of pieces of land/plots which are under consideration. However, there is no material on record to support these contentions in respect of any of these pieces of land/plots. In absence of that, we are constrained to set aside the matter to the file of the AO to examine the same a fresh in accordance with law. The assessee is directed to file necessary information/documents specifying the correct position in respect of each of the pieces of land/plots in the land revenue records, and basis that, let the AO verify with the JDA the status of these land assets and the position regarding possibility of construction on these land assets as on the valuation date in terms of either total prohibition or permitted after following prescribed rules and regulations as per the JDA Act and related regulations in force and taking the same into consideration, decide as per law. In the result, the matter is set-aside to the file of AO and the ground of the assessee is allowed for statistical purposes.
Disallowing the benefit of debt claimed to be utilised for acquiring the exempted assets - Held that:- The requirement of law to determine the net wealth is to reduce the value of all the debts owed by the assessee on the valuation date which have been incurred in relation to the said assets which are exigible to wealth tax. The emphasis is therefore on “debt in relation to the said assets”. The assessee would therefore be required to substantiate with demonstrable evidence that the debt has been incurred in relation to such assets. The proximity or connection with the asset is sine qua non for the purposes of claiming the deduction of debt. Having said that, there is again no material on record to support the contentions raised by the ld AR which satisfies the above requirement of establishing the necessary nexus between the debt and the assets in question. This issue is also set-aside to the file of the AO to examine the same afresh as per law.
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2017 (11) TMI 216 - ITAT PUNE
Valuation of asset for the purpose of Wealth Tax - valuation at value as per Govt Approved Valuer's report filed for obtaining loan from bank or the value shown by the appellant in the returns of wealth on the basis of value of the property for stamp duty purpose - Held that:- The perusal of Form No.E filed before the CWT(A) reflects that the issue raised by the assessee was against the order of WTO in making addition of ₹ 27,62,680/- to the net wealth of assessee and further in not giving exemption under section 5(1)(vi) of the Act. However, the CWT(A) decided the issue on a ground which was not raised before him i.e. in holding that the value of loan against assets pledged with bank for obtaining loan was deductible under section 2(m) of the Act. No such issue was raised before the CWT(A). The issue which needs to be adjudicated by the CWT(A) was the valuation of property.
We direct the CWT(A) to decide the issue raised before him i.e. the valuation of asset in accordance with the law. The issue of deduction under section 2(m) of the Act was never pleaded or raised by the assessee and hence, there is no merit in the order of CWT(A) in this regard. Accordingly, allowing the claim of assessee raised by way of an application under Rule 27 of the ITAT Tribunal Rules, we remit this issue back to the file of CWT(A). The grounds of appeal raised by the Revenue are allowed for statistical purposes.
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2017 (11) TMI 214 - ITAT VISAKHAPATNAM
Assessment of advances paid for purchase of plots - whether the advances made for purchase of plots constitute an asset or not within the meaning of section 2(ea) of the Act for the purpose of wealth tax act? - Held that:- From the plain reading of section 2(ea) of the W.T. Act, the taxable assets are the building or land appurtenant thereto, motor cars, jewellery, bullion and furniture or any other article made of gold, silver, platinum or any other precious metal, yatch, boats and air crafts, urban land and cash in hand etc.. but the advances made for purchase of plots are not included in the meaning of assets. Unless the Act provide for the assessment of advances for purchase of plots within the meaning of assets, the same cannot be treated as net wealth for the purpose of wealth tax act. In the absence of specific provision for making the advance for purchase of asset to wealth tax, we are unable to uphold the action of the lower authorities. - Decided in favour of assessee.
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2017 (10) TMI 603 - SUPREME COURT
Valuing an asset for the purposes of Wealth Tax Act - Correct method of the valuation of the property Alpana Cinema for assessment under Wealth Tax Act - reference was made to the Departmental Valuer by Assessing Officer - High Court has expressed opinion that Wealth Tax Officer was justified in adopting the land and building method as if there is loss in the business or in other words there is negative income, it cannot be possible to say that the property in question has no marketable value - Held that:- Overriding power has been provided to override the normal method of valuation of property as given by subsection 7(1) to arm the Wealth Tax Officer to adopt the method of valuation as given in subsection (2)(a). The purpose and object of giving overriding power is not to fetter the discretion. The Wealth Tax Officer is not obliged to mandatorily adopt the method provided in Section 7(2)(a) in all cases where assessee is carrying on a business. The language of subsection (2)(a) does not indicate that the provisions mandate the Wealth Tax Officer to adopt the method in all cases of running business
Resort to Section 7(2) (a) is discretionary and enabling provision to Wealth Tax Officer to adopt the method as laid down in Section 7(2)(a) for a running business but the above enabling power cannot be held as obligation or shackles on right of Assessing Officer to adopt an appropriate method. In the present case reference was made to the Departmental Valuer by Assessing Officer under Section 7(3). Thus there is a conscious decision of the Assessing Officer to obtain the report from the Departmental Valuer. The above conscious decision itself contains the decision of Assessing Officer not to resort to Section 7(2)(a).
The Wealth Tax Officer having referred the Departmental Valuer to value the property, in consequent to which reference for valuation report having already been received on 26.07.1977 which has relied in the assessment. Objections to the valuation report were considered by the Appellate Authority and having been rejected, we do not find any fault with the assessment made by the Wealth Tax Officer. We are of the view that the High Court did not commit any error in interfering with the order of ITAT.
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2017 (9) TMI 1607 - ANDHRA PRADESH HIGH COURT
Nature of land - whether property of the assessee at Shaikpet is an urban land, is not an asset within the meaning of Section 2(ea) of the Wealth Tax Act, 1957? - Held that:- In an agreement for joint development of a property, the owner merely agrees to part with 50% or whatever of his undivided share in the land, so as to enable the builder to put up construction and handover an agreed percentage of super built area. Agreements for joint construction are not akin to agreement of sale though they may also contain conditions of sale. For the applicability of Section 53A of the Transfer of Property Act, the act of handing over possession should have taken place in furtherance of the agreement of sale. The provisions of Section 53A are very clear. In cases of joint development, neither the builder nor the owner can claim benefit of Section 53A of the Transfer of Property Act. Therefore, Section 4(8)(a) of the Wealth Tax Act would have no application to the facts on hand. Hence the questions of law are answered in favour of the appellant/revenue.
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2017 (9) TMI 1535 - ITAT HYDERABAD
Cash seized represents the asset u/s 2(ea) of the Wealth Tax Act - Held that:- We find that the said sub clause (vi) of the clause (ea) of section 2 defines the assets to mean “cash in hand” in excess of ₹ 50,000 of individuals and HUF.
Undisputedly, the assessee is an individual. The Longman Business dictionary defines “cash in hand” as the amount of money in the form of cash that a company has after it has paid all its costs; the amount of money held by a company in the form of notes and coins. But, in the case before us, the cash is no longer in the form of notes and coins, but is in the form of a deposit in PD A/c under the control of the Department. The interpretation of the provisions of the Wealth Tax Act by the learned CIT (A), in our opinion, is therefore, misplaced. The money belonging to the assessee was lying in the P.D A/c of the CIT as on the valuation date for appropriation in accordance with section 132B of the Act. Thus, it is not under the free control of the assessee. Therefore, cash in hand in excess of ₹ 50,000 found and seized by the Department from the premises of the assessee is not taxable under the Wealth Tax Act. - Decided in favour of assessee.
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2017 (9) TMI 1240 - DELHI HIGH COURT
Wealth tax assessment - Whether the Scindia House Property of the Respondent-Assessee is its ‘business asset/stock-in-trade’ and cannot form part of its ‘wealth’ for the purposes of the WTA?" - whether the amendment to sub-section 3 of Section 40 by the Finance Act, 1988 (FA 1988) by way of insertion of a proviso to the same is clarificatory and hence retrospective in nature?” - Held that:- The Assessee has accepted that from AY 1990-91 the income earned by it from the Scindia House property is not its business income. Applying the rule of consistency as explained by the Supreme Court in Radhasoami
Satsang v. Commissioner of Income Tax (1991 (11) TMI 2 - SUPREME Court), as further explained by this Court in Mool Chand Khairati Ram v. DIT (2015 (7) TMI 922 - DELHI HIGH COURT) it must be held that even for AYs 1984-85 onwards till AY 1990-91 the Scindia House property cannot be considered to be the Assessee's stock-in-trade. In other words even for the said AYs, the Scindia House property formed part of the Assessee's net wealth for the purposes of the WTA.
For the above reasons, the Court holds that the ITAT erred in holding by its orders dated 27th December 2004 and 12th January 2005 that the Scindia House property was the Assessee's stock-in-trade and was therefore to be excluded from its net wealth for the purposes of the WTA.
Is the amendment to Section 40 (3) retrospective? - Held that:- The additional question for AYs 1984-85 to 1988-89 is answered in favour of the Revenue and against the Assessee by holding that the amendment to Section 40 (3) of the FA 1983 by the FA 1988 is not retrospective and will not apply to a period prior to 1st April 1989.
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2017 (9) TMI 366 - SUPREME COURT
Payment of Wealth Tax - remedy of appeal to the High Court - whether the High Court was justified in allowing the appeals filed by the Revenue and thereby was justified in setting aside the orders passed by the Tribunal? - Held that:- The interpretation made by this Court of Section 100 in Santosh Hazari’s Case (2001 (2) TMI 131 - SUPREME Court), would equally apply to Section 27-A of the Act because firstly, both Sections provide a remedy of appeal to the High Court; Secondly, both Sections are identically worded and in pari materia ; Thirdly, Section 27-A is enacted by following the principle of “legislation by incorporation”; fourthly, Section 100 is bodily lifted from the Code and incorporated as Section 27-A in the Act; and lastly, since both Sections are akin to each other in all respects, the appeal filed under Section 27-A of the Act has to be decided like a second appeal under Section 100 of the Code.
Now coming to the facts of the case, we find that the High Court proceeded to decide the appeals without formulating the substantial question(s) of law. Indeed, the High Court did not make any effort to find out as to whether the appeals involved any substantial question(s) of law and, if so, which is/are that question(s) and nor it formulated such question(s), if in its opinion, really arose in the appeals. The High Court failed to see that it had jurisdiction to decide the appeals only on the question(s) so formulated and not beyond it. [Section 27(5)]. The impugned orders are not legally sustainable and thus liable to be set aside.
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2017 (8) TMI 1362 - ITAT CHENNAI
Filing Wealth Tax Returns not filed his WT Returns within the due date - levy of interest u/s.17B - Held that:- In respect of the AYs 2007-08 & 2008-09, the filing of the return of wealth is mandatory duty on the assessee once the net wealth exceeds the prescribed limit. Just because, the due date for filing of the Wealth Tax Returns expire and the assessee had not filed his return within the due date, it cannot be said that the assessee is exempted from the levy of interest u/s.17B in respect of the period between the due date and the date of the notice u/s.17. The levy of interest u/s.17B is admittedly compensatory in nature. In these circumstances, respectfully following the decision of Co-ordinate Bench of this Tribunal in the case of Smt.M.R. Prabhavathy v. ACIT [2002 (1) TMI 8 - KARNATAKA High Court] the order of the Ld.CIT(A) on this issue stands reversed and that of the AO restored.
In respect of the AYs 2009-10, 2010-11 & 2011-12, it is noticed that the assessee has filed his return of income within the due date. The Revenue has not been able to dispute this fact. Even considering the submission of the Ld.DR that the return was not before the AO, the same would not stand, in so far as, that is not the ground raised by the Revenue.
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2017 (8) TMI 1234 - BOMBAY HIGH COURT
Properties/assets chargeable to tax as claimed under the WT Act - Understanding of the AO to bring certain transaction within the purview of the WT Act - notice u/s 17 issued to the assessee reopening the wealth tax assessment - Held that:- Recourse to Section 17 of the WT Act was not justified in this situation. The Tribunal felt that it could be justified in a situation where the Assessing Officer has reason to believe that the asset ought to be brought to wealth tax and should be chargeable as such, but in praesentia. The reason must be present and live and based on which he could have issued the notice. It could not be based on certain stand of the assessee before the Assessing Officer assessing him to income tax.
Merely because capital gains tax was levied, assessed and sought to be charged on certain understanding or stand of the assessee, that does not mean that the Assessing Officer under the WT Act can issue a notice under Section 17 of the said Act. The ingredients, based on which the satisfaction can be recorded under Section 17, were clearly lacking. Once they were found to be lacking, then, we do not think that the Tribunal was required to refer to any wider principle of law or decide a larger issue or controversy. On facts, the Tribunal's view can be sustained, as it is eminently possible.
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2017 (8) TMI 1010 - KERALA HIGH COURT
Whether Section 13(b) of the Indian Partnership Act, 1932, could be invoked by the Revenue in the context of clause-7 of the Partnership Deed of the firm, M/s Saraf Trading Corporation - Held that:- In the absence of any specification in clause-7 of the Partnership Deed regarding the percentage of profit or loss per partner, the Revenue was entitled to take recourse to Section 13(b) of the Indian Partnership Act. Having considered this submission, we confess our inability to accept the contention. This is for the reason that there is no provision in the Partnership Act requiring that the Partnership Deed should contain the ratio of profit and loss per partner. If that be so, the partners are free to have a provision similar to clause-7, leaving the manner of apportionment to be decided by the partners. So long as this clause reflects an agreement between the partners, irrespective of its vagueness, Section 13(b) cannot be invoked.
The upshot of the above discussion that the question of law raised as to whether the Revenue could rely on Section 13(b) of the Indian Partnership Act has to be answered against the Revenue and in favour of the assessee.
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2017 (8) TMI 472 - DELHI HIGH COURT
Condonation of delay - re-filing the appeal is regarding the practice directions issued by the Court pertaining to filing of soft copies of the paperbooks in tax matters - Held that:- Sufficient advance notice had been given to the litigants and Advocates about the filing of soft copies of the paperbooks. Further, the Registry of the Court had made appropriate arrangements for scanning services at the filing counters to facilitate the making of soft copies so that the inconvenience if any caused to the Advocates and the litigants is minimized. In any event the change could not have entailed a delay of more than two years.
It is not possible to accept that no one followed up on the filing of appeals and allowed a period of more than three years to elapse before the appeal could be re-filed. The Department has a cell in the High Court which is under the supervision of a Deputy CIT. He ought to be keeping track of the filing of appeals and should be able to know if any appeal entrusted to the panel counsel for filing has not been listed even once before the Court for a long time. Condonation of the delay of 1280 days in re-filing the appeal is dismissed
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2017 (6) TMI 978 - MADRAS HIGH COURT
Assessment to wealth tax of amalgamated company - whether Tribunal is right in law in not considering the issue of the valuation of the properties which are under challenge in appeals? - Held that:- The present case relates to the period prior to the date of amalgamation. Returns were also filed prior to the amalgamation and the notices were issued before the date of amalgamation when the assessee existed during the assessment. Amalgamation was done with effect from 1.4.1995 before the date of completion of assessment. As per the scheme, all actions and legal proceedings pending on the completion of procedures date shall be continued to enforce transfer as held by the Commissioner of Income Tax.
The existing liability has to be discharged by M/s.Balaji Industries Ltd., as continued. Therefore, the contention of the appellant would not be valid and cannot be accepted.
On examination of the Balance Sheet for the relevant assessment year, the property has been held as fixed asset and not stock in trade. Therefore, the assessee is liable to be assessed to the wealth tax. Insofar as the lands at Nellore is concerned, the same was purchased to establish Aqua Farm. As the water on the lands was not suitable for breeding fishes, the project had been given up. Therefore, the land is amenable to wealth tax. The aforesaid contention was decided by the appellate authority as well as the Tribunal on facts. Therefore, the liability of M/s.Balaji Industries Limited would continue against the M/s.Balajai Hotels and Enterprises Ltd. Learned counsel for the appellant would not raise any of the grounds which has already been discussed by the appellate Tribunal and in accordance with clause 9 and 10 of the scheme. Therefore, we are of the opinion that the said fact was considered by relying upon the relevant clause of the amalgamation scheme which was approved by the High Court of Andhra Pradesh. Therefore, no interference is required insofar as the aforesaid question of law raised by the appellant. We confirm the factual findings of the lower authorities.
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2017 (6) TMI 687 - GUJARAT HIGH COURT
Royal Buggy - art work - whether the Royal Buggy in question was not exempted under section 5 (1) (xii) of the Wealth Tax Act, 1957, because, it was covered under the first proviso to clause (viii) of sub-section (1) of Section 5 of the said Act? - Held that:- Since incidental overlapping is unavoidable, the attempt on the part of the Court in such case would be to ascertain in which clause the article would more appropriately be covered. Clause (xii), as noted, provides for exemption in case of works of art of archeology, scientific or art collection, books or manuscripts, not intended for sale. If any “work of art” can be incidentally also be put to personal use, it would not destroy its very essence or basic character of being an art work. By very nature of things its use may be rare or on special occasions.
The element of such an article being one of personal use would be wholly incidental. In the present case itself, the assessee has been pointing out that the Baggi was not meant for ordinary or daily use. Though functional, it would be used on rare ceremonial occasions. That fact that it can be put to such a use was wholly incidental to the article being a “work of art”. The Tribunal, in our opinion, therefore committed an error in holding that even if the article was one of “work of art”, since it is possible to be put to personal use, it would get ejected from Clause (xii) and would fall only under Clause (viii) of Sub-section (1) of Section 5 of the Act. The question framed is answered in favour of the assessee. Tax Appeals are allowed. Judgment of the Tribunal is set aside and that of Commissioner (Appeals) is restored.
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