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TMI Blog1985 (9) TMI 47X X X X Extracts X X X X X X X X Extracts X X X X ..... 9-70, 1970-71 and 1971-72 keeping in view the provisions of sections 2(e) and 2(m) of the Wealth-tax Act, 1957 ? " The assessee is a jeweller. He did not maintain books of account. The sales were being disclosed and he was estimating net profits thereon by applying certain rates in the assessments under the Income-tax Act, 1961.The Income-tax Officer did not accept the net profit estimate of the assessee. A higher rate of net profit was applied. On appeal, the appellate authority reduced and determined the net profit at 14 per cent. for the assessment years 1963-64 to 1970-71. The assessee accepted that rate of net profit on the sales disclosed by him. The assessment proceedings concluded in that manner. In the assessments for each year, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r years, intangible additions had not been added to the assets of the firm in another batch of appeals to net profits, it was bound to follow the same dictum and reject the contentions of the Revenue for these years also. The Revenue, having been thrown out by the Tribunal, has got the question referred to us, as mentioned above, for our opinion. The short point falling for consideration before us is whether intangible additions can be treated as wealth or assets as such. In order to appreciate this point, we must look to the definition of " assets " in section 2(e) of the Wealth-tax Act, 1957. Assets have been described therein as including property of every description, movable or immovable. If intangible additions are cash, they must b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n, therefore, be a subject-matter of assessment under the Wealth-tax Act. The above decision of the Supreme Court does lend support to the contention urged on behalf of the Department. Mr. K. N. Jain, learned counsel for the assessee, however, contended that the case of Anantharam Veerasinghaiah [1980] 123 ITR 457 (SC), is not the case relevant for our purpose. He relied upon another decision of the Supreme Court in CWT v. J. K. Cotton Manufacturers Ltd. [1984] 146 ITR 552. In this case as well, intangible additions had been made in the assessments of the assessee. These additions were taken as assets of the assessee. The contention was that the intangible additions in the circumstances of that case could not be included in the net wealth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he intangible additions on the relevant date. This decision prima facie appears to run counter to the earlier decision of the Supreme Court in Anantharam Veerasinghaiah's case [1980] 123 ITR 457. Mukharji J., however, in a separate note, while agreeing with Tulzapurkar J., made some observations which are rather significant. Mukharji J. observed that " if there had been any finding that these profits, in some form either as assets in the balance-sheet or otherwise, were with the assessee, it could have perhaps been examined whether, so long as the assessee does not bring those profits in the computation of the wealth, the assessee would be disentitled to the deductions of liabilities in respect of the same." This aspect, according to Mukhar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o consider whether there has been considerable time lapse between the estimated assessments resulting in intangible additions and their consideration as net wealth on the date of valuation. In the instant case, we are concerned with four consecutive years. It thus appears that intangible additions of 1967-68 must be held to be available in the year 1968-69, under the Wealth-tax Act. Similarly, for each year, it must be held to be available in the succeeding year till 1971-72. On this principle, it is difficult to hold that there has been considerable time gap. The presumption must, therefore, follow. A question arises whether the onus is upon the assessee or upon the Revenue to show that the intangible additions were available with the as ..... X X X X Extracts X X X X X X X X Extracts X X X X
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