9911796707
TMI Blog1984 (2) TMI 141X X X X Extracts X X X X X X X X Extracts X X X X ..... have been granted the refunds as given below : Rs. " Refund for 1964-65 5,592 Refund for 1965-66 1,20,841 Refund for 1966-67 35,641 Refund for 1967-68 2,881 Refund for 1968-69 75,749 " The WTO was of the opinion that when the assessees filed the returns, they had themselves claimed refunds of the total amount paid by them as advance tax on income. He, therefore, concluded that since the assessees knew that the income-tax refunds were due to them at the time of filing of returns themselves as they had returned considerable losses, the amounts actually refunded to them were liable to be included in their net wealth. He, therefore, computed the net wealth after allowing the liabilities of the assessees but added back the refunds granted to the assessee. 3. The assessees went in appeals to the Commissioner (Appeals) and relied upon a decision of the Gujarat High Court in CWT v. Arvindbhai Chinubhai [1982] 133 ITR 800 for the proposition that before an asset could be taken into consideration for computing the net wealth of an assessee under section 2(m) of the Wealth-tax Act, 1957 ('the Act') such asset must belong to the assessee on the relevant valuation date. The mer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in respect of their assessment orders would be allowable as a deduction even though these assessment orders are finalised after the valuation dates. The decision of the Gujarat High Court in Arvindbhai Chinubhai's case, relied upon by the Commissioner in principle is, therefore, contrary to these decisions. 5. After carefully considering all the facts and circumstances of the case, we are of the opinion that the department is entitled to succeed in the present appeals. The mere fact that the refund was actually granted to the assessee after the valuation dates would not be conclusive of the matter because if the liabilities for these years which were discharged after the valuation dates could be allowed as a deduction, there is no reason as to why the amounts of refund which were given on a later date but could be ascertained on the due date in the same manner as liabilities could not be added to the net wealth of the assessees. In CWT v. Shivjibhai Jairam (HUF) [1983] 143 ITR 759 (MP) it was held that the right to recover or sue for mesne profits is a claim for unliquidated damages. It is heritable and it is not a right or interest mentioned in the exclusionary clauses of defini ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... brother. In addition to what has been said by my learned brother, I will like to make the following observations. 7. Section 3 of the Act subjects the 'net wealth' of an assessee on the given valuation date to the charge of wealth-tax. The term 'net wealth' has been defined in clause (m) of section 2 of the said Act. According to it, simply stated, net wealth is the excess of the aggregate value of all the assets of an assessee over the aggregate value of all the debts owed by the assessee on the valuation date. The liability to pay income-tax on the total income of an assessee arises on the last day of the accounting period, which is also the valuation date, and is deductible while computing the assesee's net wealth--Kesoram Industries Cotton Mills Ltd. v. CWT [1966] 59 ITR 767 (SC) and also H.H. Setu Parvati Bayi v. CWT [1968] 69 ITR 864 (SC). The quantification of the said debt does take place after the valuation date but this quantum is in respect of the debt which existed on the valuation date and so relates back to the valuation date, irrespective of the date when it is quantified. If, however, such assessments have not been finalized on the date when the wealth-tax asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income is to be made in a later assessment year, the tax on such income shall be payable by deduction at source or by advance payment, as the case may be, in accordance with the provisions of this Chapter. (2) Nothing in this section shall prejudice the charge of tax on such income under the provisions of sub-section (1) of section 4. " Part B deals with 'Deduction at source' and Part C deals with 'Advance payment of tax'. Section 202 of the 1961 Act clarifies that deduction of tax at source is 'only one mode of recovery'. Section 199 of the 1961 Act stipulates that credit for tax deducted at source will be given in the assessment of the person from whose income the tax has been so deducted. Similar provision is contained in section 219 of the 1961 Act with regard to the tax paid in advance. It states, inter alia : " Any sum.... paid by or recovered from an assessee as advance tax... shall be treated as a payment of tax in respect of the income of the period which would be the previous year for an assessment for the assessment year next following the financial year in which it was payable and credit therefor shall be given to the assessee in the regular assessment. " 10. T ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
