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TMI Blog2005 (6) TMI 500X X X X Extracts X X X X X X X X Extracts X X X X ..... in respect of its interest earning. Since common ground is involved in all these appeals, these appeals were clubbed together, heard together and are being disposed of by this common consolidated order for the sake of convenience. 2. The brief facts of the case are that the assessee has derived income from the following heads : (1)Commission Brokerage (2)Finance Charges (3)Car Hire Charges (4)Lease Rent (5)Commission on Car (6)Service Charges (7)Miscellaneous Receipts (8)Interest on advance for purchase of property (9)Profit on sale of cars (10)Profit on sale of shares. The Assessing Officer computed the interest on percentage basis on the total income and levied interest tax for the reason that the assessee is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder section 16(4) of the Act on 12-2-2002, requiring the assessee to produce books of account. In the meantime, after receipt of notice under section 16(4), the assessee filed return of wealth belatedly, i.e., on 21-3-2002, wherein the assessee has deducted the liabilities from the assessable wealth. The Assessing Officer disallowed the claim of the assessee for the reason that as per section 2( m ) of W.T. Act, the assessee is entitled to deduct the debt which are owed by the assessee as on the date of valuation date which are incurred for the purpose of acquisition of assets and in the present case, the assets were acquired in earlier year and the debts claimed by the assessee as deduction, in no way, related to the assets. Aggrieved, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, viz. , capital plus reserves surplus to borrowed funds viz. , Fixed and other deposits. Accordingly, the learned Counsel for the assessee argued that the interest accrued and payable on deposits outstanding as on 31st March of each year is calculated and a liability is created in the books by debiting interest account (expenditure account) and crediting interest accrued on deposits (liability account). He further submitted that the property at Porur was purchased in accordance with the wishes of the shareholders in the general body meeting as could be seen from the relevant extract of the minutes of the general body meeting of the shareholders in 123rd AGM of the company held on 11-8-1993. He drew our attention to the Circular date ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... resent case, the outstanding liability has no relation or nexus with the acquisition of the property subjected to wealth-tax. He further submitted that all the debts should be presumed to be connected with the acquisition of assets subjected to wealth-tax in proportion to own funds and borrowed funds , has no meaning as properties were acquired not in the assessment year under consideration but in the years 1971, 1980 and 1994 respectively. He also relied on the order of the Tribunal in the case of Asstt. CWT v. Mukesh Steel (P.) Ltd. [1998] 60 TTJ (Chd.) 252 . Regarding taxability of Porur property, the learned Departmental Representative submitted that if the property is treated as urban land, there is no question of treating it as b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Assessing Officer issued notice under section 17 of the W.T. Act, which was not complied with by the assessee. Hence, the Assessing Officer issued notice under section 16(4). After issue of notice, the assessee has filed belated return which is invalid. Accordingly, the Assessing Officer should have passed the order under section 16(5) of the W.T Act. Instead he erroneously mentioned the section as 16(3). In this case, the assumption of jurisdiction is proper because the Assessing Officer is empowered to pass the assessment order under section 16(5) of the W.T. Act and he is also competent to pass such order. The only mistake he committed was mentioning of wrong section in the body of the assessment order. This does not lead to nullity o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the property. Therefore, we are in total agreement with the action taken by the Assessing Officer and accordingly, we confirm the same. The CWT (Appeals), however, has taken a different view on this issue and the same is reversed. 10. Regarding deduction of accrued interest on deposits, as the principal loan itself was disallowed, there is no question of allowing any deduction towards accrued interest on deposits. Therefore, we reject the claim of the assessee on this issue. As regards taxability of the Porur property, the Circular is very clear in saying that the assessee is not entitled to carry on any new Branch outside the local limits of the District in which its Registered Office is situated. Thus, the property at Porur is an ur ..... X X X X Extracts X X X X X X X X Extracts X X X X
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