Law: Wealth Tax Act, (XV of 1963)

Section: 2,2(e),16(3)

Wealth Tax Act, 1963-Section 2(e), 16(3) - Assets-Goodwill-Whether goodwill is an asset within the meaning of section 2(e) - Held no--Share of estimated profits an closing stock"-Failure of assessing officer If give any basis for valuation put by him on closing stock and shares of estimated profits allocated to assessee--Whether includible in the total wealth- Held no. An asset under section 2(e) of the Wealth Tax Act, whether movable or immovable, should be capable of description, which means that there should be a definiteness and precision with which the, property can be ascertained. Goodwill does not take any tangible or choate form, till a certain stage occurs, and as such, it cannot be termed either a movable or immovable property of any description. Since, it cannot be described or ascertained unless a particular event occurs; it is not an-asset within the meaning of section 2(e) of the Wealth Tax Act. The Wealth Tax Officer has not even given any basis for the valuation put by him on the closing stock and the share of estimated profits allocated to the assessee in appeal. This asset should, therefore, be excluded from the total wealth of the appellant. Case referred to:- Commissioner of Wealth tax v, U. C. Mahatab (1973) 27, Taxation 174 (H. c. Ind.) ref. ORDER [The order was passed by A.A. DARESHANI,-Judicial Member (New 16(3) of the Wealth Tax Act, in respect of Assessment year 1972-73 in the case of a person who was a partner in the FIRM of M/s. M_________ Exception in the first instance, was taken to inclusion is the assets of the appellant, of the share of goodwill, which the appellant was said to have possessed or have in the firm of M/s. M. Assets-subject to levy of Wealth Tax as defined in Section 2 clause (e) of the Wealth Tax Act, included property of every description, movable or immovable. The contention put forth on behalf of the appellant was that, good-will, which the appellant was said to own in the business of M ,... whatever its value or worth right be, for other purposes, was not an asset within the meaning of Section 2clause (e) of the Wealth Tax Act. This point had come up for consideration before a Division Bench of the Tribunal in…

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