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1986 (10) TMI 69

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..... amount of Rs. 3,816 was paid in the previous year for which the valuation date was 31-3-1975. Thus, for each of the assessment years 1972-73 to 1974-75, the WTO held that under the provisions of section 4(1A) of the Wealth-tax Act, 1957 ('the Act') the amount of Rs. 7,948 has to be considered as the assessee's wealth since the property of the assessee had been impressed with the nature of HUF property. The plea of the assessee that no property remained in existence and, therefore, nothing could be included in the net wealth was not accepted by the WTO. He thus brought to tax Rs. 7,948 in each of the assessment years 1972-73 to 1974-75 and in 1975-76, he brought to tax Rs. 11,764. 2. The assessee appealed. Emphasis was placed before the A .....

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..... roperty and after 31-12-1969 such property "had been converted by the individual into property belonging to the family or through the act of impressing such separate property with the character of property belonging to the family or throwing it into the common stock of the family or been transferred by the individual directly or indirectly, to the family otherwise than for adequate consideration," the property so converted or transferred would be deemed to be assets belonging to the individual. The assets transferred, according to the Explanation to the section includes any disposition, settlement, trust, covenant, agreement or arrangement. When an individual pays out of his own funds tax into the Government treasury on behalf of a HUF of w .....

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..... ht or claim conveyance or disposition of property for the benefit of another, 'delivery' contemplated therein is the delivery of one's property to another for no consideration and 'payment' implies gift of money by someone to another . . . ." 5. The payment of amount in the present case of tax by the individual on behalf of the HUF may amount to a transfer and would ostensibly come within the provisions of section 4(1A). However, the next point that arises is merely because there has been a transfer whether the amount transferred can be included as wealth of each successive valuation date after the transfer on the facts of this case. What happens when the assessee, out of his own individual funds, has paid tax into the Government coffers .....

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..... 6. The present, therefore, is not a case where property which was not transferred is held in some other form by the transferee. It is the case where the property has ceased to exist qua the transferor or the transferee. 7. To test the proposition, we would just cite two examples. Suppose, an individual impresses a certain sum of money say Rs. 20,000 with the character of HUF property and he is on the way to a bank to deposit the same when it is irretrievably lost, could it be that the value of the amount so impressed though it has ceased to be the wealth of the transferor or the transferee is to be included in the hands of the transferor for all time to come. To take another example suppose on land belonging to a HUF, the individual put .....

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