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TMI Blog1984 (3) TMI 154X X X X Extracts X X X X X X X X Extracts X X X X ..... i) of the Wealth-tax Act, 1957. " 2. The respondent-assessee is a resident-individual. The assessment year involved is 1975-76 and the valuation date shown is31-3-1975. 3. As regards ground No. 1, vide orders dated 29-5-1982 made by the Tribunal, Delhi Bench 'A' at New Delhi, in the case of Mrs. Dolly Nanda v. WTO [WT Appeal Nos. 590 to 597 (Delhi) of 1981], identical ground and issue stands decided in favour of the assessee. Again, the Tribunal, Delhi Bench 'D', had also occasion to discuss identically worded ground and an issue on appeal by the revenue in WT Appeal Nos. 1886 and 1887 (Delhi) of 1980 and there also the assessee succeeded. Yet again, the Tribunal, Delhi Bench 'D', vide orders dated 15-9-1983 made in WT Appeal No. 1204 ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the expression 'assets' as defined in section 2(e), and will have to be taken into account while computing the net wealth or the individual or the HUF and on such net wealth the charge has been imposed under section 3. " 6. The other issue was as to whether the deemed provision under section 4(1)(b) of the Wealth-tax Act, 1957 ('the Act') only applies to an individual and not a HUF. Their Lordships held that "the deeming provision in section 4(1)(b) is referable only to the quantification of his interest in the firm. Section 4(1)(b) only relates to the quantum of his interest as determined in the prescribed manner which is includible in the net wealth. " 7. The third issue involved was the valuation of HUF's interest in a partnership ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... artnership firm under the Indian Partnership Act, 1932, is not a distinct legal entity apart from the partners constituting it and equally in law the firm as such has no separate rights of its own in the partnership assets and when one talks of the firm's property or of the firm's assets all that is meant is property or assets in which all partners have a joint or common interest". Similarly, the Hon'ble Supreme Court in the case of Mrs. Bacha F. Guzdar v. CIT [1955] 27 ITR 1 held "a shareholder who buys shares does not buy any interest in the property of the company which is a juristic person entirely distinct from the shareholders". The Hon'ble Supreme Court went on to hold that the nature of the income in the hands of the company which i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Delhi Special Bench of the Tribunal in the case of Biju Patnaik v. WTO [1982] 1 SOT 623 in which the Tribunal has held that the said expression used in the first part of section 7(1) would override the second part of section 7(1) and the rules of the nature of rules 1D and 1BB of the Rules were mandatory in nature and had to be given effect to in law. 11. The Hon'ble Supreme Court in the aforesaid judgment was then interpreting the expression 'having regard to the balance sheet of such business' (on p. 496), whereas the expression used in rule 1D is as under : " The value of all the liabilities as shown in the balance sheet of such company shall be deducted from the value of all its assets shown in that balance sheet... " The express ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h does not represent the value of any asset ; (ii) the following amounts shown as liabilities in the balance sheet shall not be treated as liabilities, namely :-- (a) the paid-up capital in respect of equity shares ; (b) the amount set apart for payment of dividends on preference shares and equity shares where such dividends have not been declared before the valuation date at a general body meeting of the company ; (c) reserves, by whatever name called, other than those set apart towards depreciation ; (d) credit balance of the profit and loss account ; (e) any amount representing provision for taxation other than the amount referred to in clause (i)(a) to the extent of the excess over the tax payable with reference to the book ..... X X X X Extracts X X X X X X X X Extracts X X X X
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