9911796707
TMI Blog1988 (3) TMI 88X X X X Extracts X X X X X X X X Extracts X X X X ..... ional wealth-tax. This issue is covered against the assessee in assessee's own case in CWT v. H. H. Maharaja F. P. Gaekwad [1983] 144 ITR 304 (Guj.). Besides, it was fairly submitted that the said decision is approved by the Supreme Court in Nawab Sir Osman Ali Khan v. CWT [1986] 162 ITR 888. Therefore, the ground is rejected. 4. The next ground is in respect of valuation of various immovable properties. 4.1 At the time of hearing it was submitted that the assessee desired the Tribunal's decision in respect of the valuation of Juhu property known as Mehrangarh property which is a self-occupied residential property. In respect of the other immovable properties the various grounds raised were not pressed. It was then submitted that since now the decision of the Hon'ble High Court of Gujarat in the case of CWT v. Kasturbhai Mayabhai [1987] 164 ITR 107 is available on the issue of valuation according to the provision contained in Rule 1BB of the Wealth-tax Rules, the valuation should be made accordingly and for this purpose the issue should be restored to the file of the Wealth-tax Officer, since the provision of the said rule were clearly applicable to the property under considera ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... own by the assessee does not take into consideration any of these factors. The assessee has in his subsequent return claimed exemption in respect of this entire jewellery. This exemption is not admissible as firstly it has not been shown that this jewellery was in personal use of the assessee. It is mostly ladies jewellery which could not be personal use by the assessee. Secondly, the law has been retrospectively amended with effect from 1-4-1963 after the decision of the Supreme Court in Arundhati Balkrishna. When this has been pointed out to the assessee's representative, they have not seriously disputed the inclusion of the value of this jewellery in the assessee's hands. This brings me to the question of estimate of the market value of this jewellery." 6.1 The Commissioner (Appeals) has dealt with this aspect in para VIII confirming the inclusion and the estimate on account of jewellery. Before the Commissioner (Appeals) the assessee sought to divide the jewellery into two parts. Firstly, ornaments which are studded with diamonds, precious stones and semi-precious stones for which exemption was claimed u/s. 5(1)(viii) of the Wealth-tax Act. Secondly, the jewellery simpliciter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of articles it was submitted that the same was given at the lower level. 6.3 The Departmental Representative relied upon the orders passed by the authorities below. 6.4 We have considered the submissions made at the Bar. We have also gone through the orders passed by the authorities below on this aspect. Because of the decision of the Tribunal in assessee's own case for asst. year 1972-73 referred to earlier, where certain jewellery as per Annexure-I and Annexure-II attached to the same decision, a certain portion of the jewellery is required to be treated as personal effects as that is the finding given by the Tribunal. In para 13 of the said order the Tribunal states, "it cannot be disputed that it was custom and tradition in ruling family that the members of the family were wearing various jewellery articles daily and more particularly on ceremonial occasions by them official as will as unofficial... " and, therefore, a finding is now required to be given in respect of what articles in the list of jewellery could be taken as personal effects. In any case those articles which were subject-matter of appeal before the Tribunal in Income-tax Appeal for asst. year 1972-73 are re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e held against the assessee. Reading the provisions of section 5(1)(viii) and 5(1)(xv) together, it is clear that if any particular jewellery or ornament falls within the description of articles intended for the personal use of the assessee, then exemption can be claimed in respect of such jewellery and ornaments under section 5(1)(viii); if, on the other hand, herewith and ornaments cannot be so described, i.e., if a male assessee is the owner of certain ornaments used by females, the jewellery and ornaments would be governed by section 5(1)(xv) and would be exempt only to the extent of Rs. 25,000." Further the discussion in Three New Taxes (Wealth-tax Act) Sixth Edition by learned author A. C. Sampath Iyengar dealing with the controversy states at pages 507-508 as under : "3. Scope. This clause provides exemption with respect to five kinds of assets, namely, (i) furniture, (ii) household utensils, (iii) wearing apparel, (iv) provisions, and (v) other articles but not including jewellery. The necessary condition for the availability of the exemption is that the assets must be intended for the personal or household use of the assessee. The effect of the insertion of the wor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t may be given by the appropriate authority under the provision for rectification and within the time limit prescribed under section 35 from the date of the order." The assessing officer shall keep in mind above while deciding the issue in the context of findings recorded by IAC as extracted above. GOLD ORNAMENTS (NOT CONTAINING PRECIOUS STONES) WEIGHT 29, 124 GRAMS 7. The assessee claimed the above asset as exempt on the basis that definition of personal effect has been extended only from 1-4-1972. Considering the Board's Circular No. 72, dated 6-1-1972 explaining the provisions of Finance (No. 2) Act of 1971, being benevolent Circular, grants exemption to such as asset. But this contention was rejected by IAC on the basis that reliance on Board's Circular was misplaced. The Commissioner (Appeals) confirmed the decision on the basis of decision in the case of Jayantilal Amratlal. 7.1 Here again, we find that no finding is given by the authorities below in spite of the claim whether such gold ornaments could be treated as personal effects or not. The IAC in his order has observed in para 15 that department was contest in various cases in courts where relief was granted by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ains for camels, etc., the assessee's representative's attention was drawn to the decision of the Supreme Court in the case of H. H. Maharaja Rana Hemant Singhji v. CIT [1976] 103 ITR 61, in which their Lordships have in the context of the use of word 'personal effects' in the definition of capital asset under the Indian IT Act, 1957, is pari materia with the definition of the expression personal effects as given under the Indian Income-tax Act. Their Lordships have quoted with approval the decision in G. S. Poddar v. CWT [1965] 57 ITR 207 (Bom.) wherein it has been held as under : It was held that merely because the gold caskets were kept in the show-case did not make them part of the furniture and the rest of the articles could not be considered to be household utensils as that expression did not embrace within its sweep gold articles meant for ornamental use for special occasions, but meant household articles which were normally, ordinarily and commonly so used. It was further held in this case that the use as a decoration in the drawing room which is only calculated to give a pride of possession in not contemplated by the exemption and that the personal use which is contempla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rticles for pooja and from the remaining he has estimated 50000 tolas as personal effects. The balance valued at Rs. 11,24,768 is included in the net wealth. 8.1 The Commissioner (Appeals) confirmed the decision after considering various judicial pronouncements as also the certificate issued by the Controller of Household in assessee's palace, especially emphasising the aspect that the said certificate was not clear in respect of the point of time regarding personal or household use of the articles. According to him, the IAC was reasonable in adopting the proportion. 8.2 Before us no list of articles was submitted but it was stated that the same was given to the lower authorities. Besides, the authorities below had applied the decision in the case of G. S. Poddar and the fact that the articles were converted into stock-in-trade after four years subsequent to the valuation dated should not have weighed with the authorities below. 8.3 The Departmental Representative highlighted the fact regarding conversion to stock-in-trade. 8.4 After going through the orders of the authorities below and the evidence laid before us, we do not find any infirmity in the orders passed by the au ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er cent of the weight is excluded on the basis that they are personal effects. 9.2 The Commissioner (Appeals) observed that it was an admitted position that all the articles were not actually used in day-to-day work or in ordinary faction. Taking support from the decision of the Supreme Court where decision in the case of G. in the case of H. H. Maharaja Rana Hemant Singhji v. CIT [1976] 103 ITR 61 S. Poddar was also considered, he rejected the contention of the assessee that those articles of gold which were not being used in ordinary course and in day-to-day work but were intended for personal use on special occasions deserved to be rejected, vide paras 9.1 and 9.2 of his order. In para 9.3 of the order he considered the issue regarding the real and exact weight of such articles, the request made by the Wealth-tax Officer regarding enhancement and initiation of the penalty proceeding u/s 18(1)(c) of the Act. On this issue he ordered the determination of the precise weight and content and valuation of such gold articles, setting aside the WTO's order on this aspect. Nothing was brought to our notice with regard to this decision given by the Commissioner (Appeals) and, therefore, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... irect the assessing officer to exclude the value of this asset from the assessment of the trustees of Prince Sangramsinh Marriage Trust. INTEREST IN FIRM OF GAEKWAD CO. 11. Because of certain clause in the deed of partnership regarding the property to be received back by the assessee at the time of retirement from the firm the IAC included the full value of the property in the assessment of the assessee. The Commissioner (Appeals) in para 16 of his order on the basis of the High Court's decision in assessee's own case held that the asset could not be regarded as the property of the assessee but the assessee would be liable because the value shall have to be added while finding out the value of assessee's interest in the partnership firm as per the relevant Wealth-tax Rules. 11.1 On behalf of the assessee it was submitted that only share of the assessee in the assets of the partnership firm is required to be included. Besides, in the cases of co-partners the proportionate value of the asset is already included in the respective assessments. 11.2 On going through the orders passed by the authorities below, we are of the view that Commissioner (Appeals) has already accepted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5, i.e., at the rate of about Rs. 2.20 lacs per year. So for assessment year 1968-69, the appellant would get a reduction of Rs. 2.20 lacs and for the assessment year 1969-70 that of Rs. 4.40 lacs." 12.2 On behalf of the assessee it was submitted that there was no value that could be estimated as on the respective valuation dates. In any case since the amount was ultimately settled for Rs. 1 lakh in asst. year 1975-76 the same should be treated as the base and discounting the same at the rate of 12 per cent appropriate amount could be added in the two years under appeal. 12.3 We have gone through the orders passed by the authorities below and have also considered the submissions. According to us, the matter of estimating the fair market value as on the valuation dates in respect of the assets such as advances and debts, one cannot strictly proceed on the basis as if the assessment is being made on the next day of the relevant valuation date and then estimate the value of the asset ignoring the subsequent events. In this case, the IAC has referred to the debt as time barred debt. It appears that when the assessment was made probably the debt was revived or taken as not a time ba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... according to the Rules of Business of the Government of India, the advice and opinion of the Ministry of Law is binding on all Ministries and Departments of the Government of India. A copy of the D. O. letter in F. No. 317/38/80-WT/1128/81, dated the 1st April, 1981 from Shri S. S. Sisodia, the then Minister of Statement (Lok Sabha) is also enclosed herewith. You are directed to review immediately all cases relating to this matter and ensure that all assessments made contrary to those instructions and advice are revised/modified immediately; that all appeals and references are withdrawn; and that all arrears outstanding demands relating thereto are modified /revised. You should send cases reviewed/modified and the tax effect relating thereto. NO. BRD/SIB/103-22/85-86." 13.2 After going through the orders passed by the authorities below and considering the above referred Circular, we do not find any infirmity in the decision taken by the Commissioner (Appeals). CHIMANBAG BUNGALOW 14. The next ground is in respect of exemption granted by the Commissioner (Appeals) in respect of Chimanbag Bungalow. 14.1 It was submitted on behalf of the assessee that the IAC has not given an ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
