TMI Blog2019 (8) TMI 5X X X X Extracts X X X X X X X X Extracts X X X X ..... siness concern M/s Kargil Bullion the same is not liable to be included as assets in the wealth of the assessee for the purpose of levying wealth tax. Thus, ground no.1 of the assessee s appeal is allowed. - WTA No.12/Ind/2018 - - - Dated:- 26-7-2019 - Kul Bharat, Judicial Member And Manish Borad, Accountant Member For the Appellant : Shri K.C. Agrawal, CA For the Revenue : Smt. Ashima Gupta, CIT-DR ORDER PER MANISH BORAD, A.M: This appeal by Assessee pertaining to A.Y. 2007-08 is directed against the order of Ld. Commissioner of Income Tax(Appeals)-III, Indore, (in short CIT(A) ), dated 28.08.2018 which is arising out of the order u/s 16(3)r.w.s. 17 of the Wealth Tax Act (hereinafter called as the Act ) framed on 23.11.2012 by Wealth Tax Officer 2(2) Indore. The assessee has raised following grounds of appeal: 1. On the facts and in the circumstances of the case the Learned Commissioner Wealth Tax (Appeals) has erred in sustaining the addition made of ₹ 4,91,38,518/- made on account of cash in hand shown as on 31.03.2007 by treating ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was deposited in the bank account in the first week of April, 2007. 5. Aggrieved assessee is in appeal before the Tribunal. Ld. counsel for the assessee contended that the alleged cash in hand was purely business asset and its form part of the cash in hand shown in the audited balance sheet of the proprietorship concern M/s Kargil Bullion. 6. He also submitted that without prejudice to the submissions that the alleged asset is a business asset exempt from levy of wealth tax, Ld. AO failed to appreciate that only the net wealth is liable to be taxed since the debts and other liabilities are required to be deducted from the assets. Following written submissions were filed by the assessee. 1. First of all we would like to invite your kind attention to relevant provisions under the Wealth Tax Act and Income Tax Act, are being reproduced here:- Under the Wealth Tax Act :- a) 2(ea) assets , in relation to the assessment year commencing on the 1st day of April, 1993, or any subsequent years, means- (i)...... (ii)...... (iii)..... ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or architectural decoration or the profession of accountancy or technical consultancy or interior decoration or any other profession of accountancy as is notified by the Board in the Official Gazette shall keep and maintain such books of account and other documents as may enable the [assessing] officer to compute his total income in accordance with the provision of this Act. (2)Every person carrying on business or profession [not being a profession referred to in sub-section (1) ] shall,- (i) if his income from business or profession exceeds [one lakh twenty] thousand rupees or his total sales, turnover or gross receipts, as the case may be, in business or profession exceed or exceeds [ten lakh] rupees in any one of the three years immediately preceding the previous year; or (ii) . (iii) . (iv) . keep and maintain such books of account and other documents as may enable the [Assessing] Officer to compute his total income in accordance with the provisions of this Act. 2. From the reading of the above provisions it is clear that only specified pers ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of account of the assessee. Moreover, as per the provisions of section 3 which is a charging section of the Wealth Tax Act, three categories of assessees are liable for the wealth-tax i.e. (i) individual, (ii) HUF and (iii) company, and hence, it was not difficult for the legislature to make a specific reference of the company as such instead of using the word persons . We further submit that the assessee is engaged in the bullion business he has availed of the credit facilities from the parties. That the sales realization is a part and parcel of the commercial transactions of the apppellant. Now, a question may be raised as to why only for individual and HUF the basic exemption of ₹ 50,000/- is given if it is not the cash in hand recorded in the books of account and why it is not so in case of company, the answer is very simple. As far as the companies are concerned, there is statutory requirement under the company law and as per the provisions of the Companies Act, a company cannot keep the cash without recording the same in the books of account, but there is no statute controlling the individuals and HUFs like Companies Act specifying that every indi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (copy of bank statement is enclosed), as 31.03.2007 was Saturday and half day for banking and 1st and 2nd April, 2007 were holidays and bank yearly closing days. Thus, it is kindly requested that the cash in hand so shown in business of the assessee is not chargeable to wealth tax and hence, the same may please be treated as exempted as claimed. That THE observation of the learned CIT(A) that no details of deposits of cash subsequently were filed, is not correct. It is submitted that all such details were filed to support the contention that the cash in hand as on 31.03.2007 was deposited on next working days. Please refer page no._____ of paper book. 3. Without prejudice to above further it is submitted that the capital of the assesee as on 31.03.2007 was at ₹ 28,49,939/-, which is represented by various assets like Fixed Assets, Investments, Sundry Debtors, Deposits and Cash/Bank Balance and remaining assets are represented by Unsecured Loans, Deposits and Sundry Creditors. The details of Balance Sheet as on 31.03.2007 is as under:- LIABLITIES AMOUNT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... us, in the instant case sundry creditors and unsecured loans are representing cash and bank balance. In such circumstances, liabilities are more than the amount of cash in hand and thus, not liable for charge of Wealth Tax. Even though if proportionate capital / liabilities are appropriated towards assets then also cash in hand, being chargeable asset within the meaning of section 2(ea) derived at ₹ 20,95,628/- (49138518 X 2849939 / 66824738), which is below the limit chargeable to tax. In view of the above it is therefore, prayed that the addition so made of cash in hand as on 31.03.207 as asset be deleted. 7. Learned Departmental Representative (Ld. DR) supported the following finding of both the lower authorities. Observation of the ld. AO The submission given by the assessee has been perused I have also perused the notes given in the computation of wealth stating that (1) the assessee is having cash in hand as on 31.03.2007 at ₹ 4,83,76,696/- in his proprietorship concern M/s Kargil Bullion, Indore, which is productive/business asset and in view of the provisions of wealth tax act, the same ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mt.K.R. Ushasree (2010) 229 CTR 52 (Ker). 3.1. It is seen that similar view have been taken by the Kerala High Court in the case of A.A.Salam in WTA (1) of 2009 wherein it has been held as under : The question ..Section 2(ea)(vi) of the Act. 3.2. Further, the appellant has not submitted any proof to show that the cash in hand on 31/03/2007 was deposited in the bank account on 03/04/2007, 04/04/2007 and 05/04/2007 and what was deposited on these dates was not out of the cash sales made from 01/04/2007 to 05/04/2007. 3.3. In view of the above, the cash in hand of ₹ 4,91,38,518/- held by the appellant on 31/03/2007 is treated as an assets u/s 2(ea)(vi) of the Wealth Tax Act. 9. We have heard the rival contentions and perused the record placed before us. The only grievance of the assessee raised in this wealth tax appeal is against the finding of Ld. CIT(A) treating the cash in hand held by the assessee in his sole proprietorship concern M/s Kargil Bullion as a taxable asset liable for wealth tax. 10. We observe that the assessee is into business of trading in Bulli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r considering the judgment of Hon'ble Kerala High Court in the case of CIT vs. Smt. K.R. Ushasree (supra),observing as follows: 5.We have heard the rival submissions. We find that the assessee had submitted a statement showing computation of global value of assessee s business at ₹ 9,47,580/- as per procedure laid down in Schedule III Rule 14 of the Rules for determining the value of assets. The Ld. CWTA however rejected this argument of the assessee relying on the decision of the Hon ble Kerala High Court in the case of CIT vs. Smt. K.R. Ushasree reported in 332 ITR 75 (Ker). We find that the Hon ble Kerala High Court rejected the contention of the assessee that so far as businessman are concerned, cash in hand was an eligible asset and therefore, it was not covered by Section 2(ea)(vi) of the Act. However, we find from the perusal of the said judgment of the Hon ble Kerala High Court, the assessee therein, never argued for application of global valuation of the business in terms of Rule 14 Schedule III of the Rules for determining the value of assets. It is an admitted fact that cash in hand in the sum of ₹ 48,81,761/- in the instant case represe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as part of regular cash in hand maintained by the assessee for the business purpose and due to the holiday on the last date of financial year and on the 1st 2nd April of the subsequent financial year, the cash received by the assessee on account of sale of gold at Noida and Agra branch on 30.03.2007 31.03.2007 remained as cash in hand which was subsequently, deposited in parts in the bank account on 3rd April 2007 4th April 2007 and 5th April 2007. As a result of which cash in hand as on 30.04.2007 was only ₹ 13,230/-. Therefore, the alleged amount being held by the assessee as a business asset in the capacity as proprietor of business concern M/s Kargil Bullion the same is not liable to be included as assets in the wealth of the assessee for the purpose of levying wealth tax. Thus, ground no.1 of the assessee s appeal is allowed. 14. Apropos ground No.2, we find that same being alternate claim needs no adjudication, as it will be merely academic in nature since we have already allowed the ground no.1 of the assessee s appeal. 15. In the result, appeal of the assessee is allowed. Order was pronounced in the open court ..... X X X X Extracts X X X X X X X X Extracts X X X X
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