9911796707
TMI Blog1995 (7) TMI 125X X X X Extracts X X X X X X X X Extracts X X X X ..... year the company had purchased the following properties for consideration as mentioned against each of them from H.H. Shri Gaj Singh :--- Jawahar Khana Rs. 48,000 Saloon House Rs.1,57,000 Lake House, Mt. Abu Rs. 46,000 Land near Stadium Jodhpur Rs. 77,000 Land to the East West of Circuit House Rs. 80,000 3. The assessee also constructed a cinema house known as 'Darpan Cinema' on the land near Stadium at a cost of Rs. 50.67 lakhs, which started functioning from June 1985. The sale consideration for the properties purchased in 1971 was not paid up to assessment year 1988-89. Whereas the property of Darpan Cinema is shown as a fixed asset in the balance sheet of the Company, the other properties have been shown as stock-in-trade valued at cost amounting to Rs. 4,30,500. 4. On account of the revival of levy of wealth-tax in the case of closely held companies by section 40 of the Finance Act, 1983, the assessee filed its return of wealth for the assessment year 1984-85 on 30-3-1985 declaring total wealth of Rs. 14,52,800. On assessment, the Assessing Office ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 19,745 1,00,000 48,000 1985-86 19,745 1,25,000 48,000 1986-87 19,745 1,50,000 48,000 1987-88 19,745 1,75,000 48,000 1988-89 19,745 2,00,000 48,000 (2) SALOON HOUSE : 1984-85 3,48,445 3,48,445 3,48,445 1985-86 3,48,445 3,48,445 3,48,445 1986-87 3,48,445 3,48,445 3,48,445 1987-88 3,48,445 3,48,445 3,48,445 1988-89 3,48,445 3,48,445 3,48,445 (3) LAKE HOUSE, MT. ABU : 1984-85 4,13,000 4,13,000 4,13,000 1985-86 4,13,000 4,25,000 4,25,000 1986-87 4,13,000 4,50,000 4,50,000 1987-88 4,13,000 4,95,000 4,95,000 1988-89 4,13,000 5,50,000 5,50,000 (4) LAND NEAR STADIUM (4,500 SQ. MTS.) : -------------------------------------------------------------------- Asst Value Returned Value as per A.O. Value as per CWT(A) year --------------- ----------------- ------------------- Land Cinema L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee has taken up the ground relating to the applicability of the amendment carried out by the Finance Act, 1988. 9. The first issue to be decided, therefore, is whether the assessee company was liable for wealth-tax or not in the light of the amendment carried out by Finance Act, 1988. 10. It is not disputed by the revenue that the assessee is in the business of real estate. The assessee has been showing various assets, except Darpan Cinema, as stock-in-trade in its Balance Sheets right from the beginning. This fact is also further corroborated by the Income-tax Assessments that have been completed by the Department right from 1971, that is, from the year in which the company was incorporated, the department has always accepted this position. It is also accepted that with the passing of Finance Act, 1983, the assessee became liable to wealth-tax and accordingly started filing its wealth-tax returns. Finance Act, 1988, however, carried out certain amendments which, inter alia, excluded stock-in-trade from the purview of wealth-tax. The learned counsel for the assessee drew our attention to the Memorandum on Finance Bill, 1988 which stated that "under the existing provi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y speaking, is applicable to pending cases. But substantive law cannot apply to pending cases unless specifically provided for. There can be no intendment about the applicability of substantive law when the date of its applicability has been specifically provided for section 87 of the Finance Act, 1988 specifically provides that the amendment will be with effect from 1-4-1989. Thus, we reject the contention made on behalf of the assessee that stock-in-trade would be exempt from wealth-tax retrospectively. 15. Having established, as discussed above, that the specified assets would attract wealth-tax, the question now remains as to the valuation of each property. 16. As mentioned in the earlier part of this order, the assessee had declared the assets in its wealth-tax returns at book value, the Assessing Officer had adopted the values which in his opinion were the fair market values. In case of two properties, the matter was also referred to the D.V.O. and the valuation in respect of those properties were adopted as per the DVO's report. Since the Assessing Officer had made substantial enhancement in the value of all the assets, the assessee has raised those grounds also in the p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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