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TMI Blog2019 (8) TMI 5X X X X Extracts X X X X X X X X Extracts X X X X ..... the case the Learned Commissioner Wealth Tax (Appeals) has erred in not allowing the debts owned as against the assessed wealth so upheld, which is otherwise allowable and thus, the order so passed is without jurisdiction, illegal, wrong and bad in law." 2. Briefly stated facts as culled out from the records are that the assessee is an individual running business of trading of bullion under the sole proprietorship concern M/s. Kargil Bullion. He also derives income from trading/commission work of gold/silver trading on MCX/NCDEX. Income of Rs. 2,88,410/- declared in the return of income filed on 21.08.2007 and the same was assessed u/s 143(3) of the Act vide order dated 17.12.2009. 3. During the course of assessment proceedings u/s 143(3) of the Act, Ld. AO while examining the audited financial statement of the proprietorship concern M/s Kargil Bullion noticed that there was 'cash in hand' of Rs. 4,91,38,518/- as on 31.03.2007. As the assessee is an individual entity, Ld. AO applying the provision of u/s 2(ea)(vi) of the Wealth Tax Act held that the cash in excess of Rs. 50,000/- is liable to be included in the total wealth of the assessee and subject to wealth tax. In the submi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... With a view to stimulating investment in productive assets, it is proposed to abolish wealth-tax on all assets except certain specified assets. The term "asset" will include guest houses and residential houses including farm houses within twenty-five kilometers from the local limits of any municipality (whether known as a municipality, municipal corporation, notified area committee, town area committee, town committee or by any other name) or a cantonment board but does not include a house which has been allotted by a company to an employee, or an officer, or a director who is in the whole-time employment, having a gross annual salary of less than two lakh rupees. It will also not include a house for residential purposes, which forms part of stock-in-trade. Further, it will include motor cars other than those used in the business of running them on hire, jewelry, bullion (other than used as stock-in-trade) ; yachts and boats and aircrafts (other than those used for commercial purposes), cash in hand excess of Rs. 50,000 held by individuals or HUF's and in the case of any other person any amount not recorded in the books of account and urban land. Only those debts which have bee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dit and mostly for business purposes. Whereas in the case of Individuals/HUF, where books are not mandatory where source of income may be other than business. In such case an adhoc exemption of Rs. 50,000/- is provided. However, where books of accounts are mandatory, cash in hand is out of purview of the provisions of Wealth Tax Act. Similarly, in section 2(ea) of the Wealth Tax Act, the assets like motor car, jewellery, bullion or furniture which are held by the assessees either for the use of the business or running them on hire or as stock-in-trade are excluded from the ambit of "asset". Even in the case of yachts, boats and aircrafts which are used for commercial purposes are also excluded from the definition of "asset". It is necessary while interpreting clause (vi) which specifically deals with the treatment to be given in respect of cash in hand, the entire definition of "asset" as it was brought on the statute book. It is submitted that no discrimination can be made in respect of the productive and non-productive assets as per the category of the assessees and hence, the proper construction of clause (vi) in case of an individual and HUF should be if the cash in hand is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esuming one day immediately preceding the date of valuation, would have deposited cash in bank accounts and immediately next day i.e. first day of after valuation date, would have withdrawn the same, then such cash could not have been liable for the wealth-tax and it is much more easier for the individuals and HUFs. Though as per the general principles of interpretation where the wordings of a statute are plain, precise and unambiguous, the intention of the legislature is to be gathered from the language of the statute itself and no help of external aid should be taken, but when the statute is not exhaustive or where its language is ambiguous, uncertain, clouded or susceptible of more than one meaning, then certainly the external aid can be taken for finding out the legislative intent. Moreover, if two interpretations are possible then the interpretation in favour of the assessee should be preferred as held by the Hon'ble Supreme Court in the case of CIT v. Vegetable Products Ltd. (1973) 88 ITR 192 (SC). Further, your honour's kind attention is invited to Finance Bill, 1992, it is quite clear that the intention of the legislature was not to impose wealth tax on any productive a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reunder :- Section 2(m) 'net wealth' means the amount by which the aggregate value computed in accordance with the provisions of this Act of all the assets, wherever located, belonging to the assessee on the valuation date, including assets required to be included in his net wealth as on that date under this Act, is in excess of the aggregate value of all the debts owed by the assessee on the valuation date which have been incurred in relation to the said assets; Thus, 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 Rs. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 2(ea)(vi) of the Wealth Tax Act and that the cash in hand belongs to proprietary concern, M/s Kargil Bullion and has been deposited in the bank account on the next working days. The Assessing Officer did not accept the assessee's contention and relied on the decision of Kerala High Court in CIT vs. Smt.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 Rs. 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) tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ates the inclusion of cash which is held as business asset. We find that the Kolkata Tribunal has given the above decision after 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 Rs. 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 ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the alleged cash was 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 Rs. 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 on 26 .07.2019. X X X X Extracts X X X X X X X X Extracts X X X X
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