TMI Blog1996 (1) TMI 14X X X X Extracts X X X X X X X X Extracts X X X X ..... ax Act, 1957, cannot be invoked in the assessee's case for the assessment year 1972-73 ?" For the assessment year 1972-73, the Wealth-tax Officer in his order dated May 31, 1975, under section 35 of the Act, added a sum of Rs. 45,700 as a liability due by the assessee to the Life Insurance Corporation, omitted to be disallowed in the original assessment made on February 20, 1973, wherein such liability has been allowed as a deduction. According to the Wealth-tax Officer, rectification is possible, since the liability in question being secured and the life insurance policies in respect of which no wealth-tax was chargeable, had been wrongly allowed and the mistake had been discovered on a perusal of the evidence available on record. The A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee's appeal. Learned standing counsel appearing for the Department submitted that in view of the definite provisions contained in section 2(m)(ii) and section 5(1)(vi) of the Act, omission to disallow in the original assessment, the debt owed by the assessee on the life insurance policies, cannot be deducted from the total wealth of the assessee. According to learned standing counsel, when the provisions contained in section 2(m)(ii) were not followed in the original assessment order, made by the Wealth-tax Officer, there occurred a mistake apparent from the record warranting interference under section 35 of the Act. In order to support this contention, reliance was placed upon a decision in CIT v. Sundaram Textiles Ltd. [1984] 149 ITR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e in computing the net wealth. Therefore, it is not possible to argue that there are conflicting views in the orders of the Tribunals, inasmuch as the said conflict was settled by the abovesaid decision of the Allahabad High Court more so when there is no decision on that point by the jurisdictional High Court and especially when there is a decision by another High Court that decision will certainly be binding on the Tribunal. It was, therefore, submitted that the Tribunal was not correct in holding that the interpretation of section 2(m)(ii) involves long drawn out arguments and hence section 35 which can be applied to correct a mistake apparent from the record cannot be invoked. On the other hand, learned counsel appearing for the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lth-tax Officer was also of the view that it is not a mistake which requires discovery by a long drawn process of reasoning or examination of the arguments, on which, conceivably there may be two opinions. According to the Tribunal, the interpretation of section 2(m)(ii) of the Act has been the subject-matter of consideration by various Benches of the Tribunal on several occasions and there are conflicting decisions by the Tribunals. But on the date when the Wealth-tax Officer passed the rectification order, there was a judgment by the Allahabad High Court in Jiwan Lal Virmani v. CWT [1967] 66 ITR 338, wherein it was held that loans raised on the security of life insurance policies and utilised for acquiring assets which are assessable t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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