Decided on July 12,1994



B.S. Saluja, Judicial Member - (1.) THE assessee-company has filed the present appeal against the order dated 30-10-1989 of the Commissioner of Wealth-tax (Appeals)-IX, New Delhi on the following ground : THE learned Commissioner of Wealth-tax (Appeals) erred in law and on facts of the case in holding that the jeeps and jongas are motor cars for the purpose of Section 40 of the Finance Act, 1983 and, therefore, includible in computing the net wealth liable to tax. THE assessee-company filed a return on 24-8-1984 showing a wealth of Rs. 5,76,400. THE assessing officer issued a notice and required the assessee to show cause why the value of jeeps may not be included in the net wealth of the assessee since motor car includes jeeps. Relying on the decision of the Kerala High Court in the case of Commissioner of Agricultural Income-tax v. Good Hope Plantation [1988] 170 ITR 173, the assessing officer included the value of jeeps in the taxable wealth of the assessee-company.
(2.) The CWT (Appeals), following the said Kerala High Court judgment confirmed the action taken by the Assistant Commissioner of Wealth-tax in including the value of jeeps in the taxable wealth of the assessee company. Aggrieved by the orders of the first appellate authority, the assessee has filed the present appeal before the Tribunal. The learned counsel for the assessee company invited attention to the decision of the Tribunal, Delhi Bench "S" in the case of Kudos International v. IAC 1987 SOT 1.137-1.139. In the said decision the dispute related to working of disallowance under Section 37(3A) of the I.T. Act read with Explanation (c) thereto. It has been observed in the said decision that "the intention behind the insertion of Section 37(3A) was to disallow part of only car expenses as was apparent from Explanation (c) where also the reference had been made for expenditure on hire charges for engaging cars. Jeeps were not normally plied on hire. In Webster's Encyclopaedia 'jeep' had been defined as a light motor utility truck designed in the World War-II. Further, our attention was drawn to a judgment of the Allahabad High Court in Gopal Enterprises v. CST [1979] UPTC 1129 wherein the dispute related to the rate of sales-tax on Matador station wagon and his Lordship held that the words 'motor car' must be given a restricted meaning. Station wagon sold by the assessee although used by passengers would fall in residuary category of the notification as they were not vehicles commonly used by the passengers like other cars. A copy of the relevant provisions and of the U.P. Sales-tax Act was also produced to show that motor-cars and jeeps were treated as separate items for various purposes". In para 3 of the said decision the Tribunal further observed that "running of jeep would not be a wasteful expenditure keeping in view the nature of the assessee's business. Travelling by jeep could not be considered to be an amenity granted to any employee or a partner availing of the same for making him more comfortable. Since the Allahabad High Court had already drawn a distinction between a motor-car and similar other vehicle plying on the roads for the purposes of sales-tax classification, we are of the opinion that keeping in view the spirit of this provision and the nature of the assessee's business, the expenses incurred on running and maintenance of jeep should not be subjected to disallowance under Sub-section (3A) of Section 37". Regarding the decision of the Kerala High Court in the case of Good Hope Plantation (supra), the learned counsel pointed out that the said decision was for interpretation of entry IIIB(i) of Rule 9 of the Kerala High Court Agricultural Income-tax Rules, 1951 for the purpose of allowing deduction and that the said decision should not be relied upon for including "jeep" within the expression "motor-car". The learned counsel also submitted that the purpose of Section 40 of the Finance Act, 1983 should be kept in view while interpreting the expression "motor-car".
(3.) THE learned departmental representative mainly relied on the orders of the tax authorities. THE learned departmental representative further stated that the Kerala High Court had actually gone into the meaning of the expression "motor-car" and followed the dictionary meaning as given in the Concise Oxford Dictionary, that is, "in common parlance, a jeep is understood as a sturdy motor-car". THE said High Court also held that the said meaning is in harmony with the definition of "motor-car" under the Motor Vehicles Act [section 2( 16)]. In order to meet the point raised by the learned counsel that the aforesaid decision of the Kerala High Court is distinguishable, the learned departmental representative also pointed out that the decision of the Tribunal in Kudos International's case (supra) is also distinguishable in the same manner and on the same plea.;

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