1988 (11) TMI 131 - AT - Wealth-tax

Summary

Issues:
1. Deduction of debt owed by the appellant held in trust.
2. Valuation of equity shares of Khosla Foundry Limited.
3. Treatment of compulsory deposit under the C.B.S. Scheme for wealth-tax assessment.

Analysis:
1. The first issue revolves around the deduction of Rs. 90,270 as a debt owed by the appellant, which was held in trust for a company where the appellant served as Managing Director. The appellant initially added this amount as part of remuneration paid but later revised the return, claiming it as money held in trust pending authorization from the Central Government. The appellant received excess salary beyond the authorized amount, which was not refunded or adjusted. The Tribunal found that the appellant had full control and utilization of the excess amount, leading to the conclusion that the amount was taxable under the Wealth-tax Act.

2. The second issue pertains to the valuation of equity shares of Khosla Foundry Limited for wealth-tax assessment. The appellant contested the valuation method used by the Commissioner of Wealth-tax (Appeals), advocating for the yield method instead of Rule 1-D of the Wealth-tax Rules, 1957. The discrepancy arose due to the accounting year of the company ending before the valuation date. However, the Tribunal did not delve into this issue in the provided summary.

3. The third issue involves the treatment of a sum of Rs. 2,44,479, representing a compulsory deposit under the C.B.S. Scheme, for wealth-tax assessment. The appellant claimed that this amount should be excluded from the assessment. The Commissioner of Wealth-tax (Appeals) did not accept this claim. The Tribunal did not provide a detailed analysis of this issue in the summary.