COMMISSIONER OF WEALTH TAX ANDHRA PRADESH Vs. PACHIGOLLA NARASIMHA RAO

JUDGEMENT

(1.) The assessee is an individual. He owns certain agricultural lands and does money-lending business. The assessee for the assessment year 1971-72 returned a net wealth of Rs. 1,51,872. This figure was based solely on the valuation of his agricultural lands made by an approved valuer. But the return thus filed by the assessee did not show an amount of Rs. 25,768 which was the interest that accrued to him on his loans though not received by him. As observed by the AAC this amount of accrued interest was not brought into the books of account which were said to be maintained on cash basis.

(2.) The WTO rejected the valuers report and estimated the value of the agricultural lands of the assessee at Rs. 2,27,000. He had also added the sum of Rs. 25,768, representing the accrued interest, to the net wealth of the assessee and assessed on that basis. Aggrieved by that order of the WTO, the assessee appealed to the AAC, who, while accepting the assessees compliant regarding the WTOs order in relation to the value of the agricultural land, rejected the assessees contention pertaining to the inclusion of the accrued interest of Rs. 25,768. Against that portion of the order of the AAC, the assessee preferred a further appeal to the Income-tax Appellate Tribunal, Hyderabad Bench, which had reversed the decision of the lower Tribunal regarding the inclusion of the accrued interest in the net wealth of the assessee, with the result that the sum of Rs. 25,768 forming the interest accrued but not received by the assessee on the outstanding loans was directed to be deleted from the net wealth of the assessee.

(3.) The revenue applied for and obtained a reference to this court under s. 27(1) of the W.T. Act of 1957 (hereinafter called "the Act"). Accordingly, the following question had been referred for the opinion of this court by an order of the Appellate Tribunal dated 6/09/1976.