1983 (6) TMI 74 - AT - Wealth-tax

Issues Involved:
1. Valuation of jewellery
2. Inclusion of accrued interest in net wealth
3. Value of vehicles included in net wealth
4. Value of shares of Lake Shore Palace Hotel Pvt. Ltd.

Detailed Analysis:

1. Valuation of Jewellery:
For the assessment years 1977-78, 1978-79, 1979-80, and 1980-81, the primary issue was the valuation of jewellery. The values returned by the assessee, assessed by the WTO, and fixed by the CWT(A) varied. The CWT(A) observed that the assessee had adopted the value of jewellery based on a valuation report from March 1975 and noted an increase in value over the years. The assessee contested that there was no increase in value due to the jewellery being primarily studded with precious stones and having minimal gold content. However, the CWT(A) referenced a pamphlet from the Gem and Jewellery Export Promotion Council, Bombay, indicating increases in value for diamonds and gold. The Tribunal upheld the CWT(A)'s valuation for 1977-78, 1978-79, and 1980-81, but found the valuation for 1979-80 slightly high, reducing it to Rs. 3 lakhs, granting the assessee relief of Rs. 37,300.

2. Inclusion of Accrued Interest in Net Wealth:
The second issue was the inclusion of accrued interest from loans given by the assessee in the net wealth. The assessee argued that since the accounts were maintained on a cash basis, the interest not received should not be included. The CWT(A) disagreed, holding that the right to receive interest constituted an asset. The Tribunal, referencing the Karnataka High Court's judgment in A.T. Mirji vs. CWT, concluded that income not received under a cash accounting system should not be considered an asset. It directed the WTO to exclude the deemed interest from the net wealth for all four assessment years.

3. Value of Vehicles Included in Net Wealth:
The third issue involved the value of vehicles claimed as exempt under s. 5(1)(viii) of the WT Act. The assessee owned three vehicles, and the WTO had determined their values, allowing statutory exemptions and including the balance in net wealth. The CWT(A) upheld these additions. The Tribunal found the values assessed by the authorities reasonable, considering the appreciation in vehicle values and normal wear and tear, and decided not to interfere with the CWT(A)'s orders.

4. Value of Shares of Lake Shore Palace Hotel Pvt. Ltd.:
The final issue, specific to the assessment year 1980-81, concerned the value of shares of Lake Shore Palace Hotel Pvt. Ltd. The assessee had shown a lower value in the WT return than the purchase price. The WTO adopted the purchase price as the market value due to the lack of evidence from the assessee. The CWT(A) upheld this valuation. The Tribunal, noting the absence of evidence or the balance sheet of Lake Shore Palace Hotel Pvt. Ltd. from the assessee, declined to interfere with the authorities' orders and sustained the value.

Conclusion:
The appeals were partly allowed, with specific relief granted on the valuation of jewellery for the assessment year 1979-80, while other contentions by the assessee were not upheld.

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