1987 (5) TMI 58 - AT - Wealth-tax

Summary

Issues:
Assessment of value of shares and tax liability deduction.
Inclusion of value of silver coins in assessment for 1972-73.
Inclusion of value of silver coins in net wealth for 1974-75.
Inclusion of outstanding professional fees in net wealth for 1974-75, 1975-76, and 1976-77.
Valuation of outstanding professional fees as an asset.

Analysis:

Assessment of Value of Shares and Tax Liability Deduction:
The appeals by the assessee involved assessment for multiple years, focusing on the value of shares held and deduction of tax liability under a specific section. The assessee's counsel conceded that certain grounds related to these issues were not pressed and were consequently dismissed.

Inclusion of Value of Silver Coins - 1972-73:
The primary issue in the appeal for 1972-73 was the inclusion of the value of silver coins as an asset held by the assessee. The addition of the value of silver coins was deemed improper as the coins were found during a later search, and the assessee failed to establish the sources of investment. The Tribunal ruled in favor of the assessee, deleting the addition made in this regard.

Inclusion of Value of Silver Coins - 1974-75:
Similarly, in the appeal for 1974-75, the inclusion of the value of silver coins in the net wealth was challenged. Following the same reasoning as the previous year, the Tribunal ordered the deletion of the value of silver coins from the net wealth assessment.

Inclusion of Outstanding Professional Fees - 1974-75, 1975-76, and 1976-77:
The remaining issue pertained to the inclusion of outstanding professional fees in the net wealth for multiple assessment years. The assessee claimed that the fees were due from a production company and should not be considered as part of their wealth. However, the Tribunal disagreed, stating that the right to receive the professional fees constituted an asset and should be included in the wealth assessment.

Valuation of Outstanding Professional Fees:
Regarding the valuation of the outstanding professional fees as an asset, a dispute arose over the method of valuation. The Tribunal emphasized that the value of the asset should be determined based on what the right would fetch if sold in the open market. As the authorities had not considered this aspect, the Tribunal directed the valuation to be reassessed by the WTO, considering the potential market value of the right to receive the professional fees.

Conclusion:
The Tribunal partly allowed the appeals for 1972-73 and 1974-75, while treating the remaining appeals as allowed for statistical purposes. The judgment provided clarity on the inclusion of assets in the wealth assessment and emphasized the importance of accurate valuation methods for determining the value of rights to receive income.