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TMI Blog2009 (7) TMI 1353X X X X Extracts X X X X X X X X Extracts X X X X ..... x Act. We have heard senior counsel Sri. P.K.R. Menon appearing for the appellants and various counsel appearing for the respondents. 2. All the respondent-assessees are individuals who have, in the books of accounts, cash in hand on the valuation date, in the case of some of the assessees', above ₹ 30 lakhs, in some cases above ₹ 50 lakhs and in few cases it is above a crore of rupees and in one case cash in hand held by an individual assessee is in as much as ₹ 2.6 crores. According to the assessees all of them are engaged in business and the cash in hand is nothing but business asset which is a productive asset not forming part of asset as defined under the provisions of the Wealth Tax Act, 1957. Since the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of which is extracted hereunder: 67. The Wealth-tax Act, 1957, has far too many exemptions making it's administration enormously complicated. The valuation of certain assets such as shares also presents problems, since very high market values reflecting speculative activity can lead to a heavy burden on shareholders who are long-term investors. There is also no distinction at present between productive and non- productive assets. The Chelliah Committee has suggested that, in order to encourage the tax payers to invest in productive assets such as shares, securities, bonds, bank deposits, etc., and also to promote investments through Mutual Funds, these financial assets should be exempted from wealth-tax. Wealth-tax should ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in-trade. Further it will include motor cars other than used in the business of running them on hire or which form part of stock-in-trade; jewellery, bullion, furniture, utensils or any other articles made wholly or partly of gold, silver, platinum or any other precious metal or any alloy containing one or more of such precious metals (other than those used as stock-in-trade); yachts and boats and aircrafts (other than those used for commercial purposes), cash in hand in excess of ₹ 50,000/- of individuals or HUFs and in case of any other person any amount not recorded in the books of account and urban land . The assessees have heavily relied on Minister's Speech and the above circular of Central Board of Direct Taxes to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enumerated in the sub-clauses provided under the said Section with effect from 1.4.1992. In other words, while the provisions of the Wealth Tax Act, prior to the amendment by Finance Act 1992, described and named items of assets excluded from tax, after the amendment, the assets which are subject to wealth tax are specifically identified and ear-marked by Parliament in the sub-clauses contained in Section 2(ea) of the Act. Keeping this in mind, we have to identify what are the assets covered by the various clauses of section 2(ea) and which are the assessees dealt with therein. No one can have any doubt that cash in hand is covered by clause (vi) of Section 2(ea). It is obvious that exclusion of cash in hand above ₹ 50,000/- is pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e there is no provision in the definition clause or in any other Section of the Actauthorising the Wealth Tax Officer to exclude cash-in-hand if it is found to be a productive asset. Even though Chelliah Committee recommended levy of wealth tax only on non-productive assets, Parliament has instead of leaving the matter for adjudication in the case of every assessee and every asset, proceeded to identify non-productive assets and brought all such assets within the definition clause for the purpose of wealth tax. In other words, once the statute identified non-productive assets for the purpose of assessment in the definition clause, there is no scope for any adjudication as to whether any such asset is productive warranting exclusion. In fa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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