1993 (12) TMI 41 - HC - Wealth-tax

Summary

Issues: Interpretation of ownership of gold ornaments for wealth tax assessment

Analysis:
The judgment by the High Court of Rajasthan pertains to a question of law referred by the Income-tax Appellate Tribunal regarding the ownership of gold ornaments for wealth tax assessment for the assessment years 1976-77 and 1977-78. The case revolved around whether the assessee was the owner of 80 tolas of gold ornaments or holding them for the benefit of her sons, to be given to their wives upon marriage.

The facts of the case revealed that the gold ornaments in question were acquired by the assessee at the time of her marriage from her parents and in-laws. The ornaments weighing 80 tolas of gold were received from her mother, Smt. Man Devi, and were not declared in the wealth tax return on the grounds that they belonged to the wives of her sons. An affidavit by the elder sister confirmed that the ornaments were meant to be passed on to the wives of the sons of the assessee.

The Wealth-tax Officer initially found that there was no conclusive evidence that the gold ornaments were intended for the sons' wives. The Appellate Assistant Commissioner dismissed the appeal, noting a contradiction in the assessee's stand regarding ownership. However, the Income-tax Appellate Tribunal accepted the affidavit and found that the assessee was not the owner but holding the ornaments for her sons' benefit.

The High Court analyzed the affidavit and concluded that the Tribunal's decision was justified. The court emphasized that the scope under section 27(1) of the Wealth-tax Act is limited and does not involve reappreciating evidence. Since the affidavit remained uncontroverted, a finding of fact was established. The court held that the assessee was not the owner of the ornaments but held them for her sons' benefit, as intended for their wives upon marriage.

In light of the above analysis, the High Court ruled in favor of the assessee, rejecting the Revenue's challenge. The judgment highlighted the absence of conflicting evidence or documents to warrant a different interpretation. As a result, the reference was answered in favor of the assessee, with no costs imposed.