Law:

Section:

SECTION 2(e) OF THE WEALTH-TAX ACT, 1957 - ASSET - WHETHER AMOUNT OF EXCESS ADVANCE INCOME TAX PAID BY ASSESSEE CAN BE TREATED AS AN ASSET AND IS THEREFORE INCLUDIBLE IN ASSESSEE'S NET WEALTH - HELD, YES Facts In the relevant assessment year, i.e., 1974-75, the relevant valuation date being 31-3-1974, the assessee had paid excess advance tax of certain amount. The WTO treated this amount as an asset and included the same in his net wealth. On appeal, before the AAC, the assessee contended that the provisional assessment under section 141A of the Income-tax Act, 1961 was made on 6-11-1974, i.e., long after 31-3-1974, the relevant valuation date, and the excess advance tax paid could not as such be treated as amount due to the assessee on 31-3 1974 and, hence, could not be treated as an asset of the assessee as on 31-3-1974. The AAC, however, upheld the WTO's order and the Tribunal also rejected the assessee's claim on the ground that the excess advance tax paid by the assessee should have been taken to be a deposit with the Government and that the assessee continued to be the legal owner of the excess advance tax paid. On reference : Held Apart from the decisions which take the view that the advance tax paid cannot either be treated as deposit with the Government or a reserve, the statutory provisions which compel the assessee to pay advance tax and make the non-payment of advance tax penal, make it clear that the amount of advance tax or excess advance tax paid in pursuance of a statutory compulsion cannot be taken to be a deposit. But having regard to Section 219 of the Income-tax Act, winch 1961, provides for it credit being given to the assessee for the payment of advance tax at the stage of the regular assessment, the payment of advance tax cannot be taken to be a final payment towards tax. Giving credit at the stage of the regular assessment or at the stage of the provisional assessment under section 141A of the Income-tax Act as provided under section 219 of the said Act will arise only if the assessee is entitled to the credit, that is, when he is the owner of the amount paid which has to be given credit. The fact that section 219 contemplates credit…

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