DIPTI KUMAR BASU
Vs. COMMISSIONER OF WEALTH TAX
LAWS(CAL)-1975-5-4
HIGH COURT OF CALCUTTA
Decided on
May 16,1975
DIPTI KUMAR BASU
Appellant
VERSUS
COMMISSIONER OF WEALTH-TAX
Respondents
Referred Judgements :-
SPARKS V. YOUNGE [REFERRED TO]SHIPLEY V. MARSHALL [REFERRED TO]
AHMED G.H.ARIFF V. COMMISSIONER OF WEALTH-TAX [REFERRED TO]
INGLE V. M'CUTCHAN [REFERRED TO]
MULRAJ KHATAN V. VISHWANTH PRABHURAM VAIDYA [REFERRED TO]
WEBB V. STENTON [REFERRED TO]
COMMISSIONER HINDU RELIGIOUS ENDOW MENTS MADRAS VS. LAKSHMINDRA THIRTHA SWAMIAR OF SHIRUR MUTT [REFERRED TO]
BOMBAY DYEING AND MANUFACTURING COMPANY LIMITED VS. STATE OF BOMBAY [REFERRED TO]
KESORAM INDUSTRIES AND COTTON MILLS LIMITED VS. COMMISSIONER OF WEALTH TAX CENTRAL CALCUTTA [REFERRED TO]
PURSHOTTAM N AMARSAY VS. COMMR OF WEALTH TAX BOMBAY [REFERRED TO]
PANDIT LAKSHMI KANT JHA VS. COMMISSIONER OF WEALTH TAX BIHAR AND ORISSA [REFERRED TO]
SANDERSONS AND MORGANS SOLICITORS IN THE MATTER OF BILL OF COSTS VS. MOHANLAL LALLUCHAND SHAH [REFERRED TO]
COMMISSIONER OF WEALTH TAX VS. VYSYARAJU BADREENARAYANAMOORTHY RAJU [REFERRED TO]
COMMISSIONER OF WEALTH TAX VS. PURSHOTTAM N AMERSEY [REFERRED TO]
PURNA CHANDRA BHOWMICK VS. BARNA KUMARI DEVI W/O BIBHUTI BHUSAN CHAKRAVARTY [REFERRED TO]
BANCHHARAM MAJUMDAR VS. ADYANATH BHATTACHARJEE [REFERRED TO]
Cited Judgements :-
HENRY JOSHUA SILVERSTON DIPTI KUMAR BASU VS. COMMISSIONER OF WEALTH TAX :COMMISSIONER OF WEALTH TAX [LAWS(SC)-1991-9-18] [AFFIRMED]COMMISSIONER OF WEALTH TAX VS. H S AHUJA [LAWS(DLH)-1982-2-14] [REFERRED]
COMMISSIONER OF WEALTH TAX ORISSA BHUBANESHWAR VS. VYSYARAJU BADREENARAYANA MOORTHY RAJU BERHAMPUR GANJAM [LAWS(SC)-1985-3-11] [APPROVED]
COMMISSIONER OF WEALTH TAX VS. VIJAYKUNVERBA [LAWS(GJH)-2003-7-71] [REFERRED TO]
A GASPER VS. COMMISSIONER OF INCOME TAX [LAWS(CAL)-1978-3-51] [REFERRED TO]
JUDGEMENT
Deb, J. -
(1.)The following questions of law of great importance are involved in this reference under Section 27(1) of the Wealth-tax Act, 1957, hereinafter stated as the " Act" :
"(a) Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the 'outstandings' due to the firm constituted assets the value of which was required to be included in its net wealth for the purpose of assessing the assessee's interest therein ? (b) If the answer to question No. 1 is in the affirmative whether the value of the 'outstandings' should not be reduced by (i) the estimated tax payable by the firm on the outstandings ? and (ii) the estimated tax payable by the assessee on his share therein ? (c) Whether, on the facts and in the circumstances of the case, the Tribunal was right in upholding the principle and method of valuation of the outstandings as adopted by the Appellate Assistant Commissioner ? "
(2.)The assessment year is 1964-65, and the valuation date is March 31, 1964. M/s. Om Dignam & Co., a firm of solicitors, is hereinafter stated as the "firm" The assessee is a partner of the firm. The firm maintains its books on cash basis. The firm is entitled to get costs from its clients and has submitted the bills to them. In the assessment year, the firm did not include in its balance sheet these unrealised sums, hereinafter stated as the "outstandings". The Tax Officer has included them in the balance sheet on the ground that these outstandings are the assets of the firm and arc includible in the computation of the net wealth of the assessee and on estimate, has determined the assessee's share in these outstandings at Rs. 2,50,000.
(3.)The Appellate Assistant Commissioner, on appeal by the assessee, has directed the Tax Officer to determine the assessee's share in the net wealth of the firm, under Rule 2 of the Wealth-tax Rules, 1957, by taking these outstandings into account in accordance with the percentage determined by him. And, save as to certain matters, the Appellate Tribunal has affirmed the decision of the Appellate Assistant Commissioner and has also passed an order under Section 35 of the Act with which we are not concerned.
"(a) Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the 'outstandings' due to the firm constituted assets the value of which was required to be included in its net wealth for the purpose of assessing the assessee's interest therein ? (b) If the answer to question No. 1 is in the affirmative whether the value of the 'outstandings' should not be reduced by (i) the estimated tax payable by the firm on the outstandings ? and (ii) the estimated tax payable by the assessee on his share therein ? (c) Whether, on the facts and in the circumstances of the case, the Tribunal was right in upholding the principle and method of valuation of the outstandings as adopted by the Appellate Assistant Commissioner ? "
(2.)The assessment year is 1964-65, and the valuation date is March 31, 1964. M/s. Om Dignam & Co., a firm of solicitors, is hereinafter stated as the "firm" The assessee is a partner of the firm. The firm maintains its books on cash basis. The firm is entitled to get costs from its clients and has submitted the bills to them. In the assessment year, the firm did not include in its balance sheet these unrealised sums, hereinafter stated as the "outstandings". The Tax Officer has included them in the balance sheet on the ground that these outstandings are the assets of the firm and arc includible in the computation of the net wealth of the assessee and on estimate, has determined the assessee's share in these outstandings at Rs. 2,50,000.
(3.)The Appellate Assistant Commissioner, on appeal by the assessee, has directed the Tax Officer to determine the assessee's share in the net wealth of the firm, under Rule 2 of the Wealth-tax Rules, 1957, by taking these outstandings into account in accordance with the percentage determined by him. And, save as to certain matters, the Appellate Tribunal has affirmed the decision of the Appellate Assistant Commissioner and has also passed an order under Section 35 of the Act with which we are not concerned.
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