TMI Blog1967 (7) TMI 32X X X X Extracts X X X X X X X X Extracts X X X X ..... claims made by the assessee. Thereupon, the assessee appealed before the Appellate Assistant Commissioner, who rejected the claim of the assessee in respect of residential house with the observation that they were not used for the assessee's own dwelling house but were merely used for the residential purposes of the employees of the assessee. He, therefore, expressed the opinion that the assessee was not entitled to any exemption in respect of those residential quarters under section 2(e)(ii) of the Wealth-tax Act. Out of the claim for deduction amounting to Rs. 1,28,582 and Rs. 97,008 in respect of store houses and outhouses, the Appellate Assistant Commissioner allowed a deduction of Rs. 28,710 only and rejected the rest of the claim. With regard, however, to the claim of the assessee for deduction of value of the plant and machinery and lorries and motor cars the Appellate Assistant Commissioner held that the following machinery only, valued at Rs. 4,74,255 were entitled to exemption, under section 5(1)(ix) of the Wealth-tax Act, namely : Rs. (i) Stationary wire ropes and crab winches 28,817 (ii) Tubewells 1,73,056 (iii) Water supply plant 2,72,382 --------------- 4, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere with the order of the Appellate Assistant Commissioner. An alternative contention made on behalf of the appellant in this connection was that at least 60 per cent. of the above sum as being attributable to the raising of the agricultural produce, should be allowed as a deduction. We cannot accept this contention also. Unless an asset comes within the purview of any of the exemptions provided for in the Wealth-tax Act no part of the value thereof can be excluded. " The Tribunal reversed the order of the Appellate Assistant Commissioner in respect of stationary wire ropes and crab winches valued at Rs. 28,817 with the following observation : " We are afraid, the items in question do not come within the category of 'tools and implements used by the assessee for the raising of agricultural produce' within the meaning of section 5(1)(ix) of the Wealth-tax Act. A machinery or a plant is not entitled to exemption, even if it is wholly used for agricultural purpose, anless it comes within one of the exceptions provided for in the Wealth-tax Act. The Appellate Assistant Commissioner was, therefore, wrong in holding that these items are exempt under section 5(1)(ix). The Tribunal, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... allowance for taxation fell within the mischief of section 2(m)(iii) of the Wealth-tax Act. Thereupon, both the assessee and the revenue asked for reference of certain questions of law to this court. The Tribunal referred the following questions of law, at the instance of the assessee : " (1) Whether, on the facts and in the circumstances of the case, the value of stationary wire ropes and crab winches amounting to Rs. 28,817 and the value of electrical machinery, grinding mills, welding machinery, etc., aggregating to Rs. 3,04,210 and motor cars and lorries valued at Rs. 41,267 or even 60 per cent. thereof, is allowable as a deduction in the computation of the net wealth of the assessee under section 5(1)(ix) of the Wealth-tax Act, for the material valuation date ? (2) Whether, on the facts and in the circumstances of the case, the value of the residential quarters aggregating to Rs. 25,92,401 is allowable as a deduction under section 2(e)(ii) in the computation of the net wealth of the assessee as on the valuation date ? (3) Whether, on the facts and in the circumstances of the case, the assessee was entitled to a deduction from the net wealth of the assessee in respect o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing of agricultural produce. There, is no finding to The effect that electrical machinery, grinding mills, welding machinery, etc., valued at Rs. 3,04,210 are also used for raising agricultural. crop. We, therefore, cannot give an affirmative answer in favour of the assessee on the materials before us. We merely say that these may satisfy the description of tools and machinery under section 5(1)(ix) of the Wealth-tax Act, but their allowability for deduction under section 5(1)(ix) will depend upon the further finding that they are used for the purposes of raising agricultural produce. This the Tribunal may decide now. So far as the motor cars and lorries valued at Rs. 41,267 are concerned, Dr. Pal was not in a position to say that they were used for the purpose of raising agricultural produce and, therefore, we are not in a position to say that those are entitled to deduction in the computation of the net wealth, under section 5(1)(ix) of the Wealth-tax Act. We answer question No. 1, referred to this court at the instance of the assessee, partly in the affirmative and partly in the negative as indicated above. Question No. 2 concerns the value of residential quarters. In view ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any person who is a resident in the taxable territories in any year proves that, in respect of his income which accrues or arises during that year without the taxable territories (and which is not deemed to accrue or arise in the taxable territories), he has paid in any country, with which there is no reciprocal arrangement for relief or avoidance of double taxation, income-tax, by deduction or otherwise, under the law in force in that country, he shall be entitled to the deduction from the Indian income-tax payable by him of a sum calculated on such doubly taxed income at the Indian rate of tax or the rate of tax of the said country, whichever is the lower. " Dr. Pal argued that, although the demand for the sum of Rs. 22,00,008 was kept in abeyance, the entire sum of Rs. 44,58,015.09 was debt owed by the assessee being the subject-matter of demand under section 29 of the Indian Income-tax Act and as such deductible from the computation of the wealth-tax of the assessee. Dr. Pal further submitted that the fact that the assessee may subsequently get relief under section 49D and the fact that on the happening of that contingency the demand for Rs. 44,58,015.09 may be reduced and le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aid notice what was " now payable " (that is the debt due on the valuation date) was only Rs. 5,10,317.12. The demand was for that amount only. The rest of the assessed tax was kept in abeyance pending settlement of the double taxation relief matter. Demand for Rs. 44,58,015.09 was the before a proforma demand in nature and did not mature into an actual demand. In the Standard Vacuum Oil Co. Ltd. the demand under section 18A was a subsisting and present demand--there remained for the assessee only to submit a fresh estimate and to pay less on its own peril. In the instant case, Rs. 44,58,015.09 was not a present demand. That distinguished the Standard Vacuum Oil Co. Ltd. case from the instant case. The balance of the sum of Rs. 44,58,015.09 (that is to say the amount kept in abeyance) would be payable upon the happening of the contingency that the assessee failed to get double taxation relief. That makes the sum of Rs. 22,00,008 payable upon a contingency. In the case of Keshoram Industries and Cotton Mills Ltd. v. Commissioner of Wealth-tax the Supreme Court observed : " To summarized : A debt is a present obligation to pay an ascertainable sum of money, whether the amount is pa ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
