9911796707
|
Home
Issues Involved:
1. Ownership of the seized gold articles on each of the eight valuation dates. 2. Impact of the seizure on the market value of the gold for wealth-tax assessments. Detailed Analysis: Issue 1: Ownership of the Seized Gold Articles The Tribunal held that the assessee was the owner of the seized gold articles on each of the eight valuation dates. The assessee did not dispute this finding. Consequently, the court affirmed this decision, stating, "Therefore, question No. 1 which is set out above, will have to be answered in the affirmative and against the assessee." Issue 2: Impact of Seizure on Market Value for Wealth-Tax Assessments The main contention from the assessee was that the market value of the seized gold articles should not be included in the net wealth due to their seizure and potential confiscation. The assessee argued that the liability to confiscation diminished the value of the gold articles in the open market. The court examined Section 7(1) of the Wealth-Tax Act, which states, "the value of any asset, other than cash, shall be estimated to be the price which in the opinion of the WTO it would fetch if sold in the open market on the valuation date." The court referred to the precedent set by the Bombay High Court in *CWT v. Purshottam N. Amersey* and the Supreme Court in *Ahmed G. H. Ariff v. CWT*, which clarified that the value should be determined assuming an open market exists. The court noted that while valuing the gold articles, the liability to confiscation should be considered. However, since the gold was only seized and not yet confiscated, the ownership remained with the assessee. The court stated, "Mere possibility of confiscation cannot be said to impose legal restriction, limitation or impediment on the ownership of the assessee." The court also discussed the relevance of the House of Lords decision in *IRC v. Crossman*, which dealt with the valuation of shares subject to restrictions in the articles of association. The court concluded that unlike the legal restrictions on share transfers in *Crossman*, the seizure of gold did not impose a similar legal impediment on ownership. The court further analyzed the Supreme Court decision in *CWT v. P. N. Sikand*, where a covenant running with the land affected its market value. The court distinguished this case by noting that the gold articles had no such legal burden or disadvantage attached to them. In conclusion, the court held that the market value of the gold articles should be included in the net wealth of the assessee. The court stated, "In our opinion, the revenue authorities and the Tribunal were right in including the market value of the gold articles as on the relevant valuation dates in the net wealth of the assessee for the assessment years in question." Conclusion: Both questions referred to the court were answered in the affirmative and against the assessee. The reference was answered accordingly with no order as to costs.
|
