9911796707
TMI Blog1991 (10) TMI 75X X X X Extracts X X X X X X X X Extracts X X X X ..... ion dates are 31st of December, 1983/84/85 86 respectively. 2. The assessee is a wholly owned subsidiary of Bhor Industries Limited (BIL). The BIL owned 3 flats along with car parking, garages, by virtue of holding certain shares in the respective co-operative housing societies as under :-- Bldg. Flat No. Value no. of shares Bennet Villa No. 42 5 shares of Rs. 50 each Anand Kamal No. 3 4 297 shares of Rs. 50 each Neelkant No. 25 5 shares of Rs. 50 each. Under agreements all dated 4-11-1980 entered into between the assessee and BIL, the assessee purchased these flats from BIL in consideration of issuance/allocation of its fully paid-up shares to BIL. It may be mentioned that the flats in Bennet Villa and Nilkant are let out ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ious co-op. societies is liable to wealth-tax. The assessee's claim for valuation of flats u/r. 1BB is accepted. " It may be mentioned that for the other years under consideration, the Asstt. Commissioner has adopted the same reasonings accepting the assessee's claim that the provisions of Rule 1-BB of the W.T. Rules, 1957, would be applicable. The Asstt. Commissioner determined the net wealth as under : Assmt. yr. Value of flats W. T. payable Net wealth 1984-85 Rs. 1,98,062 Rs. 3,883 Rs. 1,94,197 1985-86 Rs. 2,95,150 Rs. 5,787 Rs. 2,89,363 1986-87 Rs. 2,95,150 Rs. 5,787 Rs. 2,89,363 1987-88 Rs. 2,95,150 Rs. 5,787 Rs. 2,89,363 5. In appeal before the CWT (Appeals), the assessee once again agitated the issue but without success ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ould not be considered for determining its net wealth. He also submitted that since section 40 of the Finance Act, 1983, is a charging section, the same should be construed strictly. Again, according to him, neither the intention of the legislature nor the spirit of the provision is relevant to resolve the issue involved in the present appeals. He also contended that sub-section (5) of section 40 of the Finance Act, 1983, clearly contemplates that certain provisions of the W.T. Act, 1957, mentioned therein would not be applicable in the case of closely held companies. He also referred to the amendment brought in section 40 of the Finance Act, 1983, by the Finance (No. 2) Bill, 1991, with a view to urge that after the said amendment, perhaps ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anies could never be brought to tax. According to him, since a flat is a part of the building, the value thereof would be exigible to tax under section 40(3)(vi) of the Finance Act. Relying on the decision in the case of Prayaglal Agarwala Co. he submitted that we should restrain from interpreting a provision of a statute which leads to absurdity. He, therefore, urged that we should uphold the order of the CWT(A). 8. We have carefully considered the rival submission of the parties and the material to which our attention was drawn at the time of hearing and we do not find any merit in the stand taken on behalf of the assessee. It is pertinent to note that when the Wealth-tax Act, 1957, was introduced for the first time, from 1-4-1957, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Wealth-tax Act, be estimated to be the price which, in the opinion of the W.T.O. it would fetch if sold in the open market on the valuation date ; (5) For the purposes of the levy of wealth-tax under the Wealth-tax Act, in pursuance of the provisions of this section,------ (a) Section 5, clause (a) of sub-section (2) of section 7 and clause (d) of section 45 of that Act and part II of Schedule I to that Act shall not apply and shall have no effect ; (b) the remaining provisions of that Act shall be construed so is to be in conformity with the provisions of this section. (7) Subject to the provisions of sub-section (5), this section shall be construed as one with the Wealth-tax Act. " 9. On the plain reading of the aforesaid prov ..... X X X X Extracts X X X X X X X X Extracts X X X X
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