9911796707
TMI Blog1991 (2) TMI 55X X X X Extracts X X X X X X X X Extracts X X X X ..... . Sri Tikam Chand Agrawal is its karta. The assessment years concerned are 1963-64 to 1969-70, both inclusive, seven years in all. Sri Tikam Chand Agrawal was a partner in firm, Messrs. Chittar Mal Ram Dayal, in his capacity, as the karta of the assessee-Hindu undivided family. In the Income-tax assessment of the said firm, Messrs. Chittar Mal Ram Dayal, in his capacity as the karta of the assessee-Hindu undivided family. In the income-tax assessment of the said of the said loans as income of the firm. The assessee's share in the said amounts was sought to be treated as wealth of the Hindu undivided family in the relevant assessment years under the Wealth-tax Act. The assessee filed an appeal against such additions. Meanwhile, appeals prefe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tions of the Commissioner of Wealth-tax (Appeals), were liable to be taken into account in the wealth-tax assessment of the assessee-Hindu undivided family. Even on this score, the Tribunal held that no additions are permissible. The reasoning of the Tribunal is that the credits were in the books of the firm and until and unless the money was put at the disposal of the partners by the firm, no share of those credits could be treated as the net wealth of the assessee. The Tribunal also observed that the additions made on account of cash credits were in the nature of intangible additions and the share in such additions could not be treated as the net wealth of the assessee. Reliance was placed upon the decision of the Kerala High Court in Ann ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be allocated among the partners or members in the proportion in which capital has been contributed by them. The residue of the net wealth of the firm or association shall be allocated among the partners or members in accordance with the agreement of partnership or association for the distribution of assets in the event of dissolution of the firm or association, or in the absence of such agreement, in the proportion in which the partners or members are entitled to share profits. The sum total of the amounts so allocated to a partner or member shall be treated as the value of the interest of the partner or member in the firm or association." It does not appear that this rule was kept in mind by the assessing authority. In view of the rule, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the individual. The assessee challenged the same and carried the matter to the High Court. The High Court held in favour of the assessee on the following reasoning (at p. 206) : "From the fact that the assessee had been taxed on estimated income for the years 1957-58, 1958-59 and 1959-60, it is not possible to postulate that either at the time those assessment orders were made or at any subsequent time thereafter the assessee was possessed of the income assessed as an 'asset'. It must be established that the assessee had assets on the valuation dates mentioned above. There is certainly no presumption that income that had accrued as long as three years before the valuation dates should be available as an 'asset' on that date. It appears to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... relating to the assessment years 1939 to 1946 cannot be treated as available for inclusion in the net wealth of the assessee in the assessment years 1958-59 and 1959-60. This decision too is of no relevance in the facts of the present case. The result of the above discussion is that while we do not appreciate the reasoning of the Tribunal on which it allowed the assessee's appeals and dismissed the Revenue's appeals, we cannot, at the same time, answer the question stated straightaway. The proper course would be to direct the Tribunal to pass orders afresh in the light of the legal position and observations adumbrated herein. It is but proper that the Tribunal hears both the parties before passing final orders in the matter. Accordin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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