1988 (1) TMI 58 - AT - Wealth-tax

Summary

Issues Involved:
1. Validity of Protective Assessments
2. Jurisdiction of the AAC to entertain appeals
3. Determination of HUF's wealth and its sources

Issue-wise Detailed Analysis:

1. Validity of Protective Assessments:
The WTO made assessments on a protective basis for the years under consideration, which did not increase the net wealth or wealth tax payable by the assessee. The assessee appealed against this mode of assessment. The AAC concluded that the HUF possessed sufficient ancestral property and income from agricultural lands and money lending business, thus directing the WTO to treat the assessments on a substantive basis. The Tribunal upheld the AAC's decision, confirming that the HUF had sufficient joint family property to acquire the declared wealth.

2. Jurisdiction of the AAC to entertain appeals:
The Revenue raised an additional ground challenging the AAC's jurisdiction, arguing that no enhancement in net wealth or wealth tax payable was made, and thus, the assessee had no cause for grievance. The Tribunal admitted this additional ground, noting that it raised a purely legal question. The Tribunal held that an order of making a protective assessment is appealable under Section 23(1)(c) of the Wealth Tax Act, as it involves the assessee's liability to be assessed under the Act. The Tribunal dismissed the additional ground, confirming the AAC's jurisdiction.

3. Determination of HUF's wealth and its sources:
The AAC found that the HUF had a locker since 1961, a bank account operated in 1982, and possessed agricultural lands and jewellery. The AAC concluded that the HUF earned income from these sources, including money lending business, albeit without a license. The Tribunal agreed with the AAC's findings, noting that the forefathers of the Karta possessed sufficient ancestral property and income to form the nucleus for acquiring the declared wealth. The Tribunal emphasized the legal presumption of joint family property and the burden of proof shifting to the party alleging self-acquisition. The Tribunal confirmed the AAC's decision to treat the assessments as substantive.

Conclusion:
The Tribunal dismissed all appeals by the Revenue, confirming the AAC's decision to treat the assessments as substantive and not on a protective basis. The Tribunal upheld the AAC's jurisdiction to entertain the appeals and found sufficient evidence to support the HUF's possession of the declared wealth.