Law: Wealth Tax Act, 1957

Section: 3

Law: Wealth Tax Act, 1957

Section: 3

Section 3 of the Wealth-tax Act, 1957 - Charge of tax - Assessment year 1959-60 - Relevant valuation date for assessment year 1959-60 was 31-3-1959 - Act was amended altering rate of tax w.e.f. 1-4-1959 - Whether rate that was applicable to net wealth of assessee for assessment year 1959-60, was revised rate which was to be found in S chedule of Act as it stood on 1-4-1959 - Held, yes FACTS The relevant valuation date for the computation of the net wealth of the assessee for the assessment year 1959-60 was the 31-3-1959. By section 21 of the Finance Act of 1959 the Wealth-tax Act was amended altering the rate of wealth-tax in the Schedule of the Act. The amendment was made effective from the 1-4-1959. The result of this amendment was that the rate of wealth-tax, which was applicable to the net wealth of the assessee, was increased from ½% to 1%. The assessee's contention was that the amendment of the Wealth-tax Act increasing the rate of tax came into operation only from the 1-4-1959. The rate of tax on his net wealth was to be computed, on 31-3-1959 and then the rate was only ½ per cent. According to the assessee, under the Act, the rate of tax which is applicable is the rate of tax, which exists in the schedule of the Act on the relevant valuation date for the computation of the net wealth and, therefore, in the instant case the rate that was applicable was the rate which existed in the schedule on 31-3-1959. The department disallowed the assessee's claim and charged tax at the rate of 1 per cent. The Tribunal upheld the view of the revenue. On reference : HELD Although the net wealth is required to be ascertained as on a date anterior to the commencement of the financial year for which the tax is charged, the said date is only for the purpose of fixing the point of time with reference to which the quantum of wealth which will bear the tax is to be ascertained. What the quantum will be, will have to be determined according to the provisions contained in the Act at the time when the determination of the quantum would become necessary for the assessment of the tax liability for the financial year in question. The provisions of the Act, which will determine the…

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