2006 (8) TMI 143 - HC - Wealth-tax

While completing the wealth-tax assessment, the Wealth-tax Officer brought the value of jeep to wealthtax which was claimed by the assessee as exemption. - Whether, Tribunal is right in law in holding that the words motor car used for the purpose of levy of wealth-tax on company would not comprehend jeep ? - The object of including motor cars in section 40 of the Finance Act, 1983, was to refer to motor cars as assets , which are required to be taken note of while computing the net wealth of closely held companies. Assets referred to in the relevant provision cover a wide spectrum starting from gold covering precious stones, metals, lands, buildings, debts as also motor cars. Similarly, in the context in which the term is found in the provision it is meant to cover all motor vehicles other than heavy vehicles, such as lorries and buses. Hence, the term motor car includes jeeps. question is answered in favour of revenue

Summary

Issues:
1. Whether a "jeep" can be considered a motor car for wealth tax assessment purposes under the Wealth-tax Act, 1957?

Analysis:
The case involved a dispute over whether a "jeep" should be classified as a motor car for wealth tax assessment under the Wealth-tax Act, 1957. The assessee, a limited company, claimed exemption for the value of the jeep, which was contested by the Revenue. The Wealth-tax Officer and the Appellate Commissioner ruled in favor of the Revenue, considering a jeep as a motor car. However, the Tribunal, in a second appeal, sided with the assessee, holding that a jeep is distinct from a motor car in common parlance. This led to a reference being made to the High Court to determine the question of law regarding the classification of a jeep as a motor car for wealth tax purposes.

The High Court referred to the judgments of the Kerala High Court and the Madras High Court in similar cases. The Kerala High Court had interpreted a jeep as a sturdy motor car based on the Concise Oxford Dictionary and the Motor Vehicles Act, 1939. Similarly, the Madras High Court had a broad interpretation of the term "motor car" under the Income-tax Act, encompassing all vehicles moving with power. The High Court agreed with these interpretations, stating that the term "motor car" in the context of wealth tax assessment should cover all motor vehicles other than heavy vehicles like lorries and buses. Therefore, the term "motor car" was deemed to include jeeps for wealth tax assessment purposes.

In conclusion, the High Court ruled in favor of the Revenue, considering a jeep as a motor car for wealth tax assessment under the Wealth-tax Act, 1957. The judgment was based on the interpretations provided by the Kerala High Court and the Madras High Court, which considered jeeps to fall within the definition of a motor car for taxation purposes.