2002 (9) TMI 78

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..... e Assessing Officer therefore was competent to make the assessment of the net wealth of a closely held private company, the assessee herein, even though that company had been subjected to a winding up order made by the company court. - The Assessing Officer having ascertained all the liabilities set out in the statement filed along with the return, there was no further need for the Assessing Officer to verify the books of account of the company. - The question referred to us is therefore answered in favour of the Revenue and against the assessee.
Judge(s) : R. JAYASIMHA BABU., K. RAVIRAJA PANDIAN. JUDGMENT The judgment of the court was delivered by R. JAYASIMHA BABU J.-The question referred in these tax cases at the instance of the a .....

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..... On further appeal to the Tribunal, the Tribunal held that companies in liquidation are not exempt from assessment to wealth-tax and that the valuation made by the Commissioner did not require any interference. Section 2(h) of the Wealth-tax Act, 1957, defines a company, inter alia, as a company formed and registered under the Companies Act, 1956. During the relevant assessment years, wealth-tax was chargeable in respect of the net wealth on the corresponding valuation date "of every company, not being a company in which the public are substantially interested..." Neither the definition of "company", nor section 40 of the Finance Act which fastens a liability on the net wealth of companies in which the public are not substantially interest .....

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..... o on other grounds set out in section 433 of the Companies Act. Even in cases where winding up is directed on the ground that at the time of making the order, the company is unable to pay its debts, it may still be found subsequently that the company has surplus assets after meeting the claims of all its creditors. The distribution of surplus assets among the contributories of a company in liquidation is not unknown. The fact that the Wealth-tax Act does not contain a provision similar to section 178 of the Income-tax Act would not make any difference to the taxability of the net wealth of a closely held private company which has been subjected to a winding up order. The Assessing Officer therefore was competent to make the assessment of .....

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