1971 (11) TMI 3 - SC - Wealth-tax

Change of previous Year - Valuation Date - Once the previous year of the assessee was changed for the purpose of income-tax it became incumbent on the part of the wealth-tax authorities to take the last date of that year as the valuation date - revenue s appeal dismissed

Summary

Issues:
1. Assessment year for wealth-tax liability.
2. Interpretation of "valuation date" under the Wealth-tax Act.
3. Impact of changing the previous year for income-tax on wealth-tax assessment.

Analysis:
The case involves a dispute regarding the assessment year for wealth-tax liability of a company. The company changed its previous year for income-tax purposes from ending on March 31 to ending on June 30. The Wealth-tax Officer initially considered the valuation date for wealth-tax assessment as March 31, 1957, while the company argued it should be June 30, 1957. The Appellate Assistant Commissioner supported the company's stance, leading to an appeal by the department to the Income-tax Appellate Tribunal. The Tribunal upheld the company's argument, prompting the department to appeal to the High Court.

The High Court, considering the definition of "valuation date" under section 2(q) of the Wealth-tax Act, ruled in favor of the company. The High Court's decision was challenged in the Supreme Court. The Supreme Court analyzed the relevant provisions, emphasizing that the valuation date for wealth-tax should align with the changed previous year for income-tax. The Court highlighted that once the company altered its previous year for income-tax with departmental consent, the wealth-tax authorities were obligated to consider the last date of that year as the valuation date, as mandated by the Act.

The Supreme Court dismissed Civil Appeal No. 151 of 1969 due to an invalid certificate but upheld the dismissal of Civil Appeal No. 1781 of 1971 on its merits. The Court directed the department to bear the costs of the assessee in the latter appeal. Ultimately, the appeals were dismissed, affirming the High Court's decision in favor of the company. The judgment clarifies the importance of consistency in determining the valuation date for wealth-tax assessment, especially when the previous year is modified for income-tax purposes.