2019 (5) TMI 440 - AT - Wealth-tax

Wealth Tax Liability - Whether vehicles reflected in the balance sheet are chargeable to wealth tax? - assessee has not filed Wealth Tax Return for the A.Y. 2009-10 hence, the case was reopened - difference finding of statement of wealth chargeable to tax and ultimately net wealth tax liability has been computed by the AO - appellant has not demonstrated that vehicle have been purchased out of loan, and the loan outstanding is more than the value of vehicle? - Since the appellant company has not been able to quantify the debt outstanding against the vehicle, plea of the assessee that the cash credit account has been used to purchase the said vehicle was, therefore, not accepted by the CIT(A) and thus at the time of hearing, the Learned Counsel further prays for the issue to be set aside to the file of the Learned CIT(A) to verify the same afresh - HELD THAT - It fit and proper to set aside the issue and to restore the same to the file of the CIT(A) for fresh adjudication of the matter as indicated above. We further direct the CIT(A) to consider the relevant record in support of the claim of the assessee which is also part of the record before us and also to take into consideration, the details of the accounts and/or relevant evidences which the assessee may choose to file in support of his claim at the time of hearing of the appeal. Hence, the assessee s appeal is allowed for statistical purposes.

Issues:
1. Appeal against the order passed by the Commissioner of Income Tax (Appeals) under the Wealth Tax Act, 1957 for the Assessment Year 2009-10.
2. Determination of wealth tax liability based on fixed assets including vehicles.
3. Dispute regarding the source of funds for purchasing vehicles and calculation of net wealth below taxable limit.
4. Request for setting aside the issue for fresh adjudication by the Commissioner of Income Tax (Appeals).

Analysis:
1. The appeal was filed against the order passed by the Commissioner of Income Tax (Appeals) under the Wealth Tax Act, 1957 for the Assessment Year 2009-10. The case involved the determination of wealth tax liability based on the fixed assets, including vehicles, valued at a specific amount. The assessee had not filed the Wealth Tax Return for the relevant year, leading to the reopening of the case to assess the wealth tax liability.

2. Upon examination of the balance sheet for the Assessment Year 2009-10, it was found that the vehicles reflected in the balance sheet were chargeable to wealth tax. The total wealth tax liability was computed by the Assessing Officer, and the same was confirmed by the Commissioner of Income Tax (Appeals). This led to the appeal being filed before the Appellate Tribunal.

3. During the hearing, the assessee claimed that the payment for motor cars was made through a cash credit facility, and the outstanding cash credit amount on the valuation date was higher than the value of the vehicles. However, the Commissioner of Income Tax (Appeals) noted that the assessee failed to demonstrate the correlation between each vehicle and the loan amount outstanding against them. The appellant's plea that vehicles were purchased using the cash credit account was not accepted due to the lack of evidence regarding the loan outstanding against the vehicles.

4. The Appellate Tribunal, after hearing the arguments from both parties, decided to set aside the issue and directed the Commissioner of Income Tax (Appeals) to reexamine the matter. The Tribunal instructed the Commissioner to consider the relevant records and any additional evidence provided by the assessee during the fresh adjudication. The appeal was allowed for statistical purposes, and the decision was pronounced in open court on 25/04/2019.

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