R.L. Segel, Judicial Member - (1.) THE appeal by the revenue and the cross-objection by the assessee, Hukam Chand (HUF), arising out of the order of the AAC, have been consolidated, heard together and are being disposed of by a common order for the sake of convenience. THE year of the assessment involved is 1 971-72 for which the relevant valuation date is 31-3-1971.
(2.) The WTO on the basis of the wealth-tax return filed by the assessee in addition to the net wealth returned for the year. (sic) added Rs. 2,74,500 being the amount due to the assessee-HUF from the bigger HUF of which Hukam Chand, the karta of the assessee-HUF, was a member, by observing as under : For the assessment year 1972-73 the assessee has shown the net amount due from Pt. Lila Ram as Rs. 2,74,500 (i.e., compensation payable Rs. 4,35,000 less amount adjusted by it: Lila Ram Rs. 1,60,500). This amount has not been shown during the period under assessment as it is stated that the actual amount was received in May 1972 by the assessee though the family had received it in May 1971 and was adjusted and carried out before 31-3-1972. When the bigger family had received the said amount, it is to be found as to what was the position as on 31-3-1971. Though the money was not received by this date, yet it was due in the shape of compensation and this is bound to be a receivable asset as the amount of compensation stood determined. I, accordingly, add a sum of Rs. 2,47,500 as calculated by the assessee during 1972-73. Aggrieved by the said addition, the assessee brought the matter by way of appeal before the AAC. In the memo of appeal, the assessee-HUF had taken the stand that the aforesaid addition of Rs. 2,74,500 by the WTO to his net wealth was bad in the eyes of law. When the appeal came up for hearing, the assessee sought permission and was permitted to raise the additional ground that the entire net wealth returned by the assessee and assessed by the WTO could not in law be taxed as the net wealth of the assessee for the year under consideration and so the assessment made by the WTO was null and void in view of the provisions of Section 20(1) of the Wealth-tax Act, 1957 ('the Act'). The AAC, however, held that the WTO was not justified in adding back the said sum of Rs. 2,74,500 to the net wealth of the assessee.
(3.) IN the appeal filed by the revenue, the departmental representative has urged that on the facts and in the circumstances of the case the AAC was not justified in deleting the addition of Rs. 2,74,500 receivable as compensation on the partition of the bigger HUF. IN support of his stand, the departmental representative relied on the ratio of the deeisions of the Allahabad High Court in the cases of Dwarka Nath v. CWT [1966] 62 ITR 304 and Banarsi Dass v. CWT [1970] 76 ITR 104. These arguments were controverted by the learned counsel for the assessee, Mr. Mittal, who in support of his cross-objections urged that, in view of Section 20(1), the wealth-tax assessment of the assessee-HUF was void ab initio.;