KAMLA AHLUWALIA Vs. WEALTH TAX OFFICER
INCOME TAX APPELLATE TRIBUNAL
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Vimal Gandhi, Judicial Member -
(1.) THE short point involved in these two appeals by the assessee is whether on facts the learned DCWT(A) is justified in upholding the withdrawal of proportionate liabilities towards municipal taxes amounting to Rs. 47,549 and Rs. 42,445 in assessment years 1982-83 and 1983-84 by applying provisions of Section 2(m)(ii) of Wealth-tax Act (the Act) in rectification proceedings carried under Section 35 of the Act.
(2.) The facts briefly stated are that assessee's returns of wealth were accepted under Section 16(1) of the Acton March 20, 1987. In the aforesaid assessed wealth, the deduction of entire municipal taxes on house property including the portion which was treated as exempt under Section 5(1)(iu) of the Wealth-tax Act was allowed. It is seen from record that in assessment years 1978-79 and 1980-81, the proportionate liabilities of municipal taxes attributable to the portion of the house, treated as exempt was disallowed and this disallowance was confirmed on appeal by Income-tax Appellate Tribunal vide its order dated December 10, 1986. Taking note of aforesaid order of ITAT, the WTO disallowed proportionate liabilities through rectification as noted earlier. The assessee challenged the disallowance in appeal but remained unsucessful. Hence these appeals.
We have heard Shri Ram Parkash, the husband of the appellant on behalf of the appellant and Smt. Sadhana Pavadia, the learned Departmental Representative on behalf of the revenue. The following contentions were advanced on behalf of the appellant:
1. That in two other cases, namely, that of Shri Ram Parkash and Smt. Saraswati Devi assessed by the same Wealth-tax Officer, entire tax liability was allowed in similar circumstances;
2. That the WTO has no power to take action under Section 35 of the Wealth-tax Act as decision of ITAT had come earlier to the assessment made on March 20, 1987 and Assessing Officer had full notice of said decision. At any rate, the point involved was debatable and could not be said to be a mistake apparent from the record. In this connection our attention was drawn to the decision of Hon'ble Gujarat High Court in the case of CWT v. Bhausaheb Balasaheb Kadam  128 ITR 493, 496 (Guj.);
3. That in view of Section 2(m)(iii) of the Act 'tax' which should include municipal tax, has to be treated as deductible liability.
While opposing aforestated contentions, the learned Departmental Representative relied upon order of the Assessing Officer. She emphasised that in the light of decision of Tribunal in assessee's own case on identical point, a mistake apparent from record had occurred which was rightly rectified under Section 35 of the Wealth-tax Act. She accordingly supported the impugned order.
(3.) WE have given careful thought to the rival submissions of the parties and examined material on record in the light of submissions advanced. The order of the Assessing Officer under Section 35 is based upon order of the Tribunal given under similar circumstances. The fact is not in dispute. The assessee's objection that said order of ITAT was available and in the knowledge of the Assessing Officer when assessment was made under Section 16(1) and, therefore, rectification was bad in law, is without any substance and is hereby rejected. Likewise, we are not concerned with the cases of Shri Ram Parkash and Smt. Saraswati Devi in which the entire liability of municipal taxes is claimed to be allowed. WE are to consider, whether having allowed deduction of municipal taxes levied in respect of house property part of which was exempt under Section 5(1)(iv) of the WEalth-tax Act, the WTO committed a mistake apparent from record liable to be rectified under Section 35 of the W.T. Act. The Assessing Officer, as also in the course of appeal before us, the action taken was sought to be justified on the basis of decision taken by ITAT in assessee's own case.;
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