TMI Blog2001 (10) TMI 260X X X X Extracts X X X X X X X X Extracts X X X X ..... orders of CIT(A) by contending that disallowance under section 40(a)(iia) of 1961 Act can be made only with reference to the wealth-tax leviable under the Wealth-tax Act, 1957 (in short 1957 Act) or any tax of similar nature chargeable under any law in force in any country outside India and, consequently, no disallowance can be made with reference to wealth-tax chargeable under section 40 of Finance Act, 1983, which is a different enactment by itself. His line of argument is that initially wealth of closely-held companies was chargeable to tax under 1957 Act but later on by virtue of section 13 of Finance Act, 1960, wealth of such companies was exempted from the provisions of 1957 Act. However, the wealth of such companies was again made chargeable to wealth-tax by section 40 of Finance Act, 1983, which is a self-contained code for levy of such tax. Hence, it was contended that levy of such wealth-tax cannot be treated or considered as wealth-tax under 1957 Act. Proceeding further, it was submitted that merely because the other provisions of the 1957 Act have been made applicable by virtue of subsection (7) of section 40 of Finance Act, 1983, it cannot be said that levy under sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0 of Finance Act, 1983 are differently worded by the legislature and, therefore, the said judgment is distinguishable. 5. After considering the rival submissions of the parties and the relevant provisions of different enactments and the case law referred to by the parties, we are unable to accept the contentions of theId.counsel for the assessee. In order to appreciate the controversy, it would be useful to quote the provisions of section 40 of the Finance Act, 1983 and section 40(a)(iia) of 1961 Act: "Section 40 of Finance Act, 1983 Revival of levy of wealth-tax in the case of closely-held companies: 40 (1): Notwithstanding anything contained in section 13 of the Finance Act, 1960 (13 of 1960) relating to exemption of companies from levy of wealth-tax under the Wealth-tax Act, 1957 (27 of 1957), (hereinafter referred to as the Wealth-tax Act), wealth-tax shall be charged under the Wealth-tax Act for every assessment year commencing on and from the 1st day of April, 1984 in respect of the net wealth on the corresponding valuation date of every company, not being a company in which the public are substantially interested, at the rate of two per cent of such net wealth; (2) For ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion by any director, manager, secretary or any other employee of the assessee, such employee holding not less than one per cent of the equity share of the assessee. Explanation: For the purposes of this clause, "relative' shall have the meaning assigned to it in clause (b) of Explanation I to section 8OF of the Income-tax Act; (vii) motor-cars; and (viii) any other asset which is acquired or represented by a debt secured on any one or more of the assets referred to in clause (i) to clause (vii): Provided that this section shall not apply to any asset referred to in clause (i), (ii), (iii), (iv), (v) or (vi), which is held by the assessee as stock in-trade in a business carried on by it or, in the case of motor-cars referred to in clause (vii), they are held as stock-in-trade in such business or registered as taxies and used as such in a business of running motor cars on hire carried on by the assessee. Explanation: Where any question arises as to whether all or any of the assets referred to in clause (i), (ii), (iii) or (iv) are held by the assessee as stock-in-trade in a business carried on by it, the question shall be decided in accordance with such directions as the B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt with reference to which such tax is charged, but does not include any tax chargeable with reference to the value of any particular asset of the business or profession;' The perusal of section 40(a)(iia)shows that assessee is not entitled to claim deduction from his income in respect of payment of wealth-tax chargeable under the 1957 Act or any tax of similar nature chargeable under any law in force in any foreign country. We are not concerned with the payment of wealth-tax chargeable under any foreign law. So the only dispute is whether the payment of wealth-tax under section 40 of Finance Act, 1983 can be said to be payment of wealth-tax chargeable under the 1957 Act. 6. The perusal of sub-section (1) of section 40 clearly shows that the levy of wealth-tax is under the Wealth-tax Act, 1957 as is clear from the words .wealth-tax shall be charged under the Wealth-tax Act'. It has also been made clear that Wealth-tax Act means Wealth-tax Act, 1957. In view of such specific words, it is difficult for us to hold that revival of wealth-tax is independent of wealth-tax provisions of 1957 Act. The words 'revival of levy of wealth-tax' in the marginal note also indicates that what w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Such action of the concerned authority was challenged before the High Court by the assessee but remained unsuccessful. On further appeal, the Supreme Court held that levy of special excise duty was chargeable under section 80 of Finance Act, 1965 and, therefore, the assessee was not entitled to Tax Credit Certificate inasmuch as section 28OZD provided for such certificate only with reference to excise duty chargeable to tax under Excise Act. The said decision can be applied to the present case only if the levy of wealth-tax is itself chargeable under the Finance Act, 1983. The comparison of section 80 of Finance Act, 1965 and section 40 of Finance Act, 1983 shows that different language has been employed by the Legislature. To appreciate the same, it would be useful to quote the provisions of section 80 of Finance Act, 1965 as under: "80 (1) When goods of the description mentioned in this section chargeable with a duty of excise under the Central Excises Act (as amended by this Act or any subsequent Act of Parliament) read with any notification for the time being in force issued by the Central Government in relation to the duty so chargeable, are assessed to duty, there shall be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... here are no such wordings in section 80(1) of Finance Act, 1965. On the contrary, it independently levies the special excise duty. (2) Sub-section (3) of Finance Act, 1965 says that special excise duty shall be in addition to excise duty chargeable under Excise Act while under the Finance Act, 1983, it is not so. (3) Sub-section (4) of Finance Act, 1965 makes the provisions of Finance Act applicable relating to the levy and collection of excise duty and refund etc. to the levy of special excise duty, which is not the position under section 40 of Finance Act, 1983. On the contrary, sub-section (7) of section 40 of Finance Act, 1983 makes the provision of section 40 as part of Wealth-tax Act, 1957 itself.' In view of the vital difference in the language of two enactments we hold that the decision of Supreme Court in the case of Associated Cement Companies Ltd. is quite distinguishable and, therefore, cannot be applied to the present case. 8. The decision of the Tribunal in the case of Park Hotel (P.) Ltd. is also distinguishable. The Tribunal in that case was not concerned with the issue, which is before us. The question in that case was whether the leasehold rights could be i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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