9911796707
TMI Blog1987 (6) TMI 72X X X X Extracts X X X X X X X X Extracts X X X X ..... 1982-83 and 1983-84. The assessee was assessed for these two years originally by the Wealth-tax Officer on total wealth of Rs. 17,13,974 and Rs. 18,51,800 respectively. While computing the assessee's wealth at the above figures, the Wealth-tax Officer had allowed income-tax liability to the extent of Rs. 5,41,829 and Rs. 2,86,502 for these two years. The Commissioner of Wealth-tax, after noticing that the actual income-tax liability due from the assessee as on the valuation dates, was Rs. 75,575 for the assessment year 1982-83 and ' nil ' for the assessment year 1983-84, considered that the Wealth-tax Officer's action in allowing higher amounts of deduction towards such liabilities was erroneous and prejudicial to the interests of revenue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nces, it is stated that there is no error in the orders of the Wealth-tax Officer which could be said to be prejudicial to the interests of revenue. The Commissioner, however, did not accept the assessee's contentions and directed the Wealth-tax Officer to reduce the tax liability already allowed to Rs. 75,575 and nil for the assessment years 1982-83 and 1983-84 respectively. 3. Shri Venkatesan, the learned representative of the assessee, once again reiterates the arguments he advanced before the Commissioner. He points out that for the purpose of computing the assessee's wealth for these two years the assessee's interest in the firm of M/s. Prabhakar Tile Works was taken at Rs. 16,42,063 and Rs. 10,95,250 as on 30-6-1981 and 30-6-1982 b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was an error in the order of the Wealth-tax Officer but it was also prejudicial to the interests of revenue. Reliance, in this connection, was placed on the decision of the Mysore High Court in the case of V.K. Uchal v. Commissioner of Commercial Taxes [1967] 20 STC 67 and the decision of the Karnataka High Court in the case of V.G. Krishnamurthy v. CIT [1985] 152 ITR 683. 4. Shri Ravibalan, the learned departmental representative, relies on the orders of the Commissioner. He also points out that the assessee cannot, during the course of proceedings under section 25(2), request the Commissioner to revise certain errors which are prejudicial to him. He has to take other remedies for getting such errors remedied by filing appeals or revis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Wealth-tax Officer has taken the assessee's credit balances with the firm as on 30-6-1981 and 30-6-1982 and not 31-3-1982 and 31-3-1983, which are the valuation dates for these two assessment years. If the withdrawals made by the assessee towards tax payments, payment of compulsory deposit, insurance payments and other expenses, between the period from 1-7-1981 to 31-3-1982 and 1-7-1982 to 31-3-1983, are taken into account, the assessee's credit balance, which in turn, represents the assessee's interest in the above firm on the valuation dates, comes to Rs. 11,46,320 for the assessment year 1982-83 and Rs. 7,16,461 for the assessment year 1983-84 as against Rs. 16,42,153 and Rs. 10,95,250 taken by the Wealth-tax Officer. This clearly shows ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iate proceedings. In this case, however, the quantum of tax liability to be allowed as a deduction is so intricately related to the question of the assessee's interest in the partnership firm, inasmuch as it is the withdrawals from the firm which has brought about the reduction in the tax liability, that it cannot be said that both the issues are to be considered separately in order to consider the question whether there was any error which is prejudicial to the interests of the revenue in the assessment orders passed by the Wealth-tax Officer. It may also be noticed that the Karnataka High Court in the case of V.G. Krishnamurthy held that section 263 of the Income-tax Act could be invoked only when the Commissioner prima facie finds that t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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