Decided on April 18,1984


Cited Judgements :-



Mal Lodha, J. - (1.)THE Income-tax Appellate Tribunal, Jaipur Bench, Jaipur (for short the "Tribunal"), has referred the following question for the decision to this court:
"(1) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the sum of Rs. 82,264 was not includible in the wealth of the assessee in the wealth-tax assessment for the assessment years 1968-69 to 1971-72?"

(2.)THE assessee, Shri Rangnath Bangur of Deedwana, during the pendency of the reference died on April 11, 1983, His legal representatives, Shri Shreekumar Bangur and Smt. Kamla Devi Bangur, were brought on record, vide order dated April 17, 1984.
We are concerned in this reference with the assessment years 1968-69, 1969-70, 1970-71 and 1971-72. The valuation dates are March 31, 1968, March 31, 1969, March 31, 1970, and March 31, 1971. The assessment to income-tax of the assessee in respect of the assessment year 1967-68 was completed on February 10, 1972. As a result of the assessment, the assessee became entitled to a refund of Rs. 82,264. The refund had arisen as the assessee had deposited excess advance tax in response to the demand notice issued to him by the ITO under Section 210 of the I.T. Act, 1961 (Act No. 43 of 1961) (for short the "I.T. Act"). The final tax determined was much less and, therefore, the assessee became entitled to (refund of) Rs. 82,264. The ITO while computing the wealth of the assessee in respect of the aforesaid four assessment years included the aforesaid amount of Rs. 82,264 in the net wealth of the assessee. An appeal was filed by the assessee against the orders of the WTO. The AAC by his order dated April 26, 1973, confirmed the order of the WTO, in so far as it related to the inclusion of Rs. 82,264 in the wealth of the assessee. Further appeals were filed before the Tribunal. The Tribunal by a common order dated December 20, 1974, allowed the appeals and deleted the amount of Rs. 82,264 from the assessments. Reference application under Section 27(1) of the W.T. Act, 1957 (No. 27 of 1957) (for short "the Act" herein), was filed and the Tribunal has referred the aforesaid question for our decision.

We have heard Mr. J. P. Joshi, learned counsel for the Revenue, as well as Mr. Rajesh Balia, learned counsel for the legal representatives of the assessee, Sri Rangnath Bangur.

The assessee had deposited the amount of advance tax in pursuance of the demand notice under Section 210 of the I.T. Act issued by the ITO. Rs. 82,264 was deposited in excess as is apparent from the final assessment order of the ITO by which the tax determined was much less than the amount that was paid as advance tax. The final assessment order gave rise to the refund of Rs. 82,264. It is clear that the entire amount of advance tax was deposited by the assessee with the income-tax department in response to a statutory demand notice. Until the assessment was finalised and excess amount of tax so paid became payable to the assessee, the assessee had no right or interest or lien of any kind whatsoever thereon. The right for refund had accrued in favour of the assessee after the finalisation of the assessment order relating to the assessment year 1967-68 on February 10, 1972.

Valuation date has been defined in the Act as under:

"(q) 'valuation date', in relation to any year for which an assessment is to be made under this Act, means the last day of the previous year as defined in Section 3 of the Income-tax Act, if an assessment were to be made under that Act for that year :...

(ii) in the case of a person who is not an assessee within the meaning of the Income-tax Act, the valuation date for the purposes of this Act shall be the 31st day of March immediately preceding the assessment year ; "

(3.)SECTION 14 of the Act deals with the return of wealth. Sub-section (1) of SECTION 14 is as follows:
"14. (1) Every person, if his net wealth or the net wealth of any other person in respect of which he is assessable under this Act on the valuation date was of such an amount as to render him liable to wealth-tax under this Act, shall, before the 30th day of June of the corresponding assessment year, furnish to the Wealth-tax Officer a return in the prescribed form and verified in the prescribed manner setting forth the net wealth as on that valuation date :

Provided that in the case of a person whose net wealth or the net wealth of any other person in respect of which he is assessable under this Act includes the value of any assets held in a business or profession and the time (whether fixed originally or on extension) for furnishing the return of his total income or, as the case may be, of the total income of the other person aforesaid for the said assessment year under Sub-section (1) or Sub-section (2) or Sub-section (3) of SECTION 139 of the Income-tax Act, expires on or after the 30th day of June aforesaid, the return in respect of such net wealth for the assessment year may be furnished before the expiry of the time for furnishing such return of income. "

According to Section 16(1) of the Act, if the WTO is satisfied without requiring the presence of the assessee or production by him of any evidence that . a return made under Section 14 or Section 15 is correct and complete, he shall assess the net wealth of the assessee and determine the amount of wealth-tax payable by him or the amount refundable to him on the basis of such return.

The Gujarat High Court in CWT v. Raipur Manufacturing Co. Ltd. [1964] 52 ITR 482 held that in order to constitute a "debt" within the meaning of the expression in Section 2(m) of the W.T. Act, it is not a pre-requisite that there must be an ascertained sum of money legally recoverable in praesenti and that it is sufficient if there is a present obligation to, pay a sum of money whether the amount thereof is ascertained or not and whether the amount is presently payable or payable at a future date and that it must not be a contingent obligation. The assessee in that case claimed to deduct a sum of Rs. 11,40,755 in computing his net wealth which consisted of (i) provision for taxation, and (ii) the last instalment of advance tax due on the valuation date. In Raipur Mfg. Co.'s case [1964] 52 ITR 482, it was observed as under (p. 522):

" A condition subsequent, the fulfilment of which may result in the reduction or even extinction of liability, would not have the effect of converting the liability which attaches under such notice under Section 18A into a contingent liability. "

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