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Inclusion of compulsory deposits in net wealth under Wealth-tax Act, 1957. Analysis: The judgment pertains to the inclusion of compulsory deposits in the net wealth of the assessee under the Wealth-tax Act, 1957. The assessee had made compulsory deposits under the Compulsory Deposit (Income-tax Payers) Act, 1974. The valuation date was March 31, 1975, with deposits amounting to Rs. 8,260. The Wealth-tax Officer included these deposits in the net wealth, which was contested by the assessee. The Appellate Assistant Commissioner upheld the inclusion, and the Tribunal also dismissed the appeal. The key issue was whether compulsory deposits should be included in net wealth and whether their market value should be taken as the face value. The Finance (No. 2) Act, 1980, inserted section 7A with retrospective effect from April 1, 1975. This section deemed compulsory deposits to be deposits with a banking company under the Banking Regulation Act, 1949, for the purpose of exemption under the Wealth-tax Act, 1957. The judgment referred to decisions by other High Courts on similar issues. The Calcutta High Court in Smt. Sunanda Devi Singhania v. CWT held that compulsory deposits should be considered in computing net wealth unless the deposit is an annuity. The Bombay High Court in CWT v. Vidur V. Patel and CWT v. Master Asutosh K. Mahadevia also held that compulsory deposits are assets under the Wealth-tax Act, 1957. In the present case, the assessee had already received exemption under section 5(1)(iv) of the Wealth-tax Act, 1957, up to Rs. 1,50,000. The Income-tax Officer included the compulsory deposit of Rs. 8,260 in the net wealth based on section 2(e) of the Act. The court found no issue with the Tribunal's decision to include the compulsory deposit in the net wealth, given the legal provisions and precedents cited. Consequently, the court answered the question in the affirmative, ruling against the Department. No costs were awarded in this judgment.
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