Law: Wealth Tax Act, 1957

Section: 27(1),7A,5,2(e)

Wealth tax--- ----Asset---Compulsory deposit scheme---Amount standing to credit of an assessee in compulsory deposit account is an asset ---Includible in net wealth---Indian Wealth Tax Act, 1957, S.2(e)---Compulsory Deposit (Income-tax Payers) Act, 1974---Compulsory Deposit (Income-tax Payers) Scheme, 1974. Under the Compulsory Deposit (Income-tax Payers) Scheme, 1974, the deposit in any year is repayable with interest thereon at any time after the expiry of five years from the end of the year in which the deposit had been made. The amount standing to the credit of the assessee in the compulsory deposit scheme account falls within the expression "property of every description movable or immovable used in section 2(e) of the Wealth Tax Act, 1957. Therefore, the amount standing to the credit of an assessee in the compulsory deposit account should be treated as an "asset" within the meaning of section 2(e) of the Act. CWT v. Vidur V. Patel (1995) 215 ITR 30 (Bom.) and CWT v. Master Asutosh Mahadevia (1995) 215 ITR 200 (Bom.) fol. Held, on the facts, that the assessee had already got exemption under section 5(1)(iv) of the Wealth Tax Act, 1957, to the extent of Rs.1,50,000. Therefore, the Wealth Tax Officer included in the net wealth the compulsory deposit of Rs.8,260. The Tribunal was right in including the compulsory deposit of Rs.8,260 in the net wealth of the assessee. Sunanda Devi Singhania (Smt.) v. CWT (1993) 204 ITR 842 (Cal.) ref. JUDGMENT K.A. THANIKKACHALAM, J.---At the instance of the assessee, the Tribunal referred the following question for the opinion of this Court under section 27(1) of the Wealth Tax Act, 1957 (hereinafter referred to as "the Act"). "In the facts and circumstances of the case was the Income-tax Appellate Tribunal right in holding that the compulsory deposits were includible in the net wealth and that the market value should be taken to be the face value?" The assessee, an individual, has been making compulsory deposits under the Compulsory Deposit (Income-tax Payers) Act, 1974 read, with the Compulsory Deposit (Income-tax Payers) Scheme, 1974. For the assessment year 1975-76, the valuation dated is March 31, 1975. The compulsory…

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