Wealth Tax-Arrears. - Income Tax - 1640/CBDT

INSTRUCTION NO. 1640/CBDT Dated: April 1, 1981 The net wealth-tax budget collections in the year 1984-85 Rs.107.18 crores as against Rs.93.28 crores in the year 1983-84. However the outstanding wealth-tax arrear demands as on 31-3-1984 were Rs.197.29 (gross) crores and as on 31-12-84 Rs.181.17(gross) crores. Most of these outstanding arrear demands relate to disputes about the valuation of properties and assets. An examination of the top cases relating to such arrear demands indicates that out of 22 such cases involving total arrear demands of Rs.45.71 crores there are 12 cases of former Rulers where the outstanding demands are Rs.27.25 crores 2. An examination of some of the records in the case of the former rulers indicate that lands forming part of their palaces are also being assessed at market values, creating huge paper demands. In this connection attention is invited to Boards letter in F.No.4/8/58-WT dated the 5th May, 1958 in which at para 3 it is specifically stated that any building referred to in section 5(i)(iii) should be taken to include its outhouses, garages, guest houses and land appurtenant thereto provided they are situated within the same compound or in its immediate vicinity. With this letter a list of the places exempted was attached and such lists were subsequently enlarged from time to time. It has to be noted that according to the rules of Business of the Government of India the advice and opinion of the Ministry of law is binding on all Ministries and Departments of the Government of India. You should send your compliance report within one month giving details of the case reviewed/modified and the tax effect relating thereto.