TMI Blog2016 (4) TMI 412X X X X Extracts X X X X X X X X Extracts X X X X ..... 45 - HIGH COURT, MADRAS). wherein the WDV of cars was held as basis of market value in the absence of any material produced by the Revenue to show that WDV didn’t represent the market value of the vehicle. - Decided against revenue Debt claimed by the assessee in relation to taxable assets - Held that:- We find that the assigning of debt on proportionate basis towards assets liable for wealth tax is a more reasonable and judicious method rather than making a arbitrary estimate by the Assessing officer. The CWT(A) has given a reasoned findings on the issue in dispute and, therefore, no interference is required in his findings on the issue discarding the estimate of debt made by the A.O. and accepting the assessee’s estimate holding it to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are that the assessee filed return of wealth tax on 30.11.1998 declaring total wealth of ₹ 63,39,790/-. A notice under Section 16(2) of the W.T. Act was issued and served to the assessee within the stipulated time. The ld Assessing Officer determined the value of Motor Car at ₹ 8,28,77,949 as against value of ₹ 6,92,87,901 declared by the assessee and debt in relation to assets was determined at ₹ 2,00,00,000/- as against Debt of ₹ 5,90,83,620/- declared by the assessee in revised computation of net wealth. Aggrieved with the valuation of motor cars and debt in relation to assets as on valuation date, the assessee filed an appeal before the learned Commissioner of Wealth Tax (Appeals). Before the learned Commis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... clared by the assessee. 3.2 On the other hand, learned Authorized Representative of the assessee agitated that the condition of invoking Rule 20 of IIIrd Schedule of the Wealth Tax was not fulfilled as the market value determined by the AO was not 20% higher than the value declared by the assessee. The learned Authorized Representative also submitted that the Assessing Officer has made an estimate whereas the value worked out by the assessee was based on the evidences and which has been accepted by the Assessing Officer in assessments subsequent to present assessments also i.e. AY 2012-13. The ld. AR submitted that it was difficult for the assessee to gather the insured value of the vehicles being large number of vehicles leased out to v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... : - (1) The value of any asset/ other than cash/ being an asset which is not covered by rules 3 to 10/ for the purposes of this Act/ shall be estimated to be the price which in the opinion of the Assessing Officer. it would fetch if sold in the open market on the valuation date 6.4 The Appellant submitted that in the absence of any specific method prescribed under Rule 20 to derive at the fair market value of motor cars, the WDV of such cars computed u/s 32 of the Income Tax Act, 1961 would fairly represent the fair value of motor cars for the purposes of wealth tax. In support of the same, the Appellant placed reliance on a recent decision of the Hon ble Chennai High Court in the case of CWT vs. T.V. Sundaram Iyenger and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pted by the assessee. The approach adopted by the Appellant seems to be practical and no inconsistency on cogent grounds were observed by the AO. On the other hand, I find that the method adopted by the Ld. AO is arbitrary and the AO has not been able to bring on record any positive material to support his method or put forth any rational basis to reject the method followed by the Appellant. 6.6 In light of the above discussion, I find merit in the contention of the Appellant for taking WDV of vehicles for taking value for wealth tax purposes. Even the car insurance companies take into account the amount of depreciation for assessing the insured value of vehicles. In view of this, Ground No 1 is allowed in favour of the appellant. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and perused the material on record. Regarding this issue, the CWT(A) has given his findings, which is reproduced below: 7.1. Ground No. 2:- The Appellant is a NBFC, engaged in the business of finance and leasing. Being an NBFC, the Appellant has huge borrowings which are used by it for the purpose of business. Given the nature and the quantum of the Appellant's business, the Appellant is in possession of mixed funds through which it transacts its day to day business of leasing and financing. Hence, no direct nexus can be accurately established between the assets purchased by the Appellant with the amount borrowed by it for the purpose of business. In the absence of any clear distinction of funds available with the Appellant, the Ap ..... X X X X Extracts X X X X X X X X Extracts X X X X
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