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TMI Blog1984 (7) TMI 161X X X X Extracts X X X X X X X X Extracts X X X X ..... application of section 35 of the Wealth-tax Act, 1957 ('the Act'). For these five assessment years, originally, the assessments were completed on 17-8-1978. Subsequently, appeals were filed against them and ultimately, the matters were brought to this Tribunal in WT Appeal Nos. 62 to 68 (Hyd.) of 1979. Some relief was granted to the assessee by common orders of this Tribunal passed in those appeals on 4-7-1980. Consequential orders were passed by the WTO redetermining the wealth of the assessee in pursuance of the orders of this Tribunal dated 4-7-1980 passed in WT Appeal Nos. 62 to 68 (Hyd.) of 1979. Subsequently, the WTO found that the urban assets in excess of the values specified in the Schedule (Part I given under the Act) were not charged with additional wealth-tax by mistake. According to the WTO, it is a mistake apparent from record and as such, he issued a notice under section 35 to the assessee calling for his/her objections on 19-12-1981. The assessee in his letter dated 13-1-1982 stated that the additional wealth-tax is not chargeable as the residue of the urban assets was less than the taxable limit prescribed for the levy of additional wealth-tax. Due to the change in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the assessee amounted to Rs. 9,23,260. So also, for the assessment year 1972-73, the value of the immovable assets of the assessee was Rs. 6,85,168 and the value of the movable assets was Rs. 16,50,774. The liabilities eligible for deduction under section 2(m) amounted to Rs. 1,92,997 and so after deducting the liabilities from the value of the movables, the net wealth of the movable assets of the assessee came to Rs. 14,57,977. So also, for the assessment year 1973-74, the total value of the immovable assets stood at Rs. 5,42,569 and the movable assets at Rs. 17,96,336. The eligible deductions were of the value of Rs. 2,40,355. Thus, after deducting the liabilities from the value of the movables, the net wealth of the movable assets stood at Rs. 15,55,981. For the assessment year 1974-75, the value of the immovable assets amounted to Rs. 5,42,568 and that of movable assets at Rs. 20,99,713. The liabilities eligible for deduction under section 2(m) came to Rs. 1,85,327. After deducting the liabilities from the total value of the movable assets, the net wealth of the assessee in movable assets came to Rs. 19,14,386. In the objection letter filed by the assessee on 13-1-1982 whic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... instead of deleting the amount of Rs. 3,00,727, the WTO deleted only Rs. 2,47,727 towards liabilities for the assessment year 1970-71. Before the Commissioner (Appeals), reliance was placed upon the decision of the Supreme Court in T.S. Balaram, ITO v. Volkart Bros. [1971] 82 ITR 50, the Kerala High Court in Abdul Rahim Haji Jacob Sait. v. CIT [1973] 87 ITR 183 and the Calcutta High Court in CIT v. New Central Jute Mills Co. Ltd. [1976] 105 ITR 262 in support of the proposition that a debatable point of law does not represent a mistake apparent from record and for the proposition that the mistake cannot be taken to be apparent from record, if it has to be established by a long-drawn process of reasoning on points on which there may conceivably be two opinions. The learned Commissioner (Appeals) held that the criteria laid down in the above decisions has to be applied in the light of the relevant provisions of the Wealth-tax Act which are dealt with in the rectificatory proceedings. He extracted the relevant clauses from the Finance Act, applicable for the assessment year 1970-71. The Commissioner (Appeals) held that as far as the assessment year 1970-71 is concerned, no set off of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h law and the facts in the record. " According to the Commissioner (Appeals), there was absolutely no warrant for the assumption that the value has to be taken at the net figure after deducting all the liabilities as claimed by the assessee before him. Thus, he dismissed the appeals filed before him. 4. Aggrieved against the impugned common order of the Commissioner (Appeals), the second appeals are brought before this Tribunal and, thus, the matters stand for our consideration. We have heard Shri P. Muralikrishna, the learned counsel for the assessee, and Shri C. Satyanarayana, the learned senior departmental representative. In the grounds filed before this Tribunal, the assessee had taken the stand that no additional wealth-tax is levied by passing an order under section 35 as there was no mistake apparent from the record. It is also contended that the WTO assumed jurisdiction under section 35 without the requirements of law being satisfied. According to him, there was no mistake apparent from record and that the learned Commissioner (Appeals) justified the action of the WTO by a long-drawn process of reasoning and by taking a particular legal view of the matter rejecting anoth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax applicable to an individual or HUF, who happened to hold an urban asset. In this slab, we find that if the value of the urban asset does not exceed Rs. 5 lakhs, then no tax is leviable. But if the value of the urban asset is between Rs. 5 lakhs and Rs. 10 lakhs, the tax prescribed was 5 per cent of the amount by which such total value exceeds Rs. 5 lakhs. According to the said para, 'urban asset' means either building or land or any right in the building or land situated in an urban area. The words 'urban area' is defined in rule I of Paragraph B. It includes an area which is comprised within the jurisdiction of a municipal corporation which has a population of not less than 10,000 according to the last preceding census of which the relevant figures have been published before the valuation date. It is not disputed in this case that the immovable asset held by the assessee was urban asset. The only dispute is that all the liabilities must be deducted from the value of the urban asset and if they are so deducted, the value of the urban assets held by the assessee falls below the taxable limit prescribed in Item (3) of Paragraph A of Part I of the Act, relevant to the assessment y ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sible opposite view of the matter. 6. For the assessment years 1971-72, again rule 2 of Paragraph B of Part I of the rates of wealth-tax, provided under the relevant Finance Act, clearly lays down what categories of debts and liabilities are deductible from the value of the urban asset. Rule 2 framed for the assessment year 1971-72 is as follows : " In determining, for the purposes of item (3) of Paragraph A, the value of any urban asset,-- (a) any debt (whether secured or not) incurred for the purpose of acquiring, improving, constructing, repairing, renewing or reconstructing such asset shall be deducted from the gross value of such asset ; (b) other debts which are deductible in computing the net wealth shall be deducted from the gross value of such asset [as reduced by the debts, if any, under clause (a)] only if, and to the extent that, such debts exceed the aggregate gross value of assets other than urban assets. " So also, rule 2 of Paragraph B of Part I for the assessment year 1972-73 reads as follows : " In determining, for the purposes of item (2) of Paragraph A, the value of any urban asset, (a) any debt (whether secured or not) incurred for the purpose of acquirin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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