'Commercial Establishments or Complexes' under the Wealth Tax Act, 1957 - ITAT held that the properties of Assessee at Connaught Circus, New Delhi and Sardar Mohan Singh Building, Connaught Lane, New Delhi were 'Commercial Establishments or Complexes' and therefore outside the purview of 'assets' under Section 2 (ea) (i) (5) of the Wealth Tax Act, 1957 (WTA)? - as urged by Revenue, that the expression 'commercial establishments or complexes' should be understood only in the plural and not in the singular High Court [2017 (7) TMI 1474 - DELHI HIGH COURT] as held to unable to agree with the above submission. It is obvious from a reading of the entire Section 2 (ea) WTA that the legislative intent was not to restrict the benefit of exemption any particular type of commercial establishments or complexes. By reading such a restrictions into the said clause, the Court would be writing into Section 2 (ea) WTA something which is not there. Impugned order of the ITAT does not suffer from any legal infirmity. HELD THAT:- The appeals are not pressed on the ground of low tax effect. The appeals are dismissed as not pressed. Pending applications, if any, also stand disposed of.

Stay of operation of High Court observation - interim relief pending further consideration - authority to proceed with substantive assessmentStay of operation of High Court observation - authority to proceed with substantive assessment - interim relief pending further consideration - Effect and operation of the High Court's observation in paragraph 78 permitting the Assessing Authority to proceed with substantive assessments shall remain stayed pending further consideration. - HELD THAT: - The Supreme Court, after granting leave, has stayed the operative effect of the High Court's observation in paragraph 78 which had stated that the Assessing Authority would be free to proceed to make substantive assessments in the hands of the respondent assessees. The stay is interlocutory and preserves the status quo until the Court gives further consideration to the matter. No determination was made on the merits of the underlying assessments or the correctness of the High Court's observation; the order is limited to restraining its implementation pending final adjudication.Operation of paragraph 78 of the High Court judgment is stayed; the Assessing Authority is restrained from proceeding pursuant to that observation until further orders.Final Conclusion: Leave granted; an interim stay has been placed on the High Court's paragraph 78 observation that allowed the Assessing Authority to proceed with substantive assessments, and that observation shall not operate pending further consideration by this Court.

Summary order. Special Leave Petition dismissed; delay condoned; question of law left open.

Summary order. The Special Leave Petition is dismissed; delay condoned.

Summary order. The special leave petition is dismissed; delay condoned; pending applications, if any, stand disposed of.

Summary order. Special Leave Petition dismissed; delay condoned.

Substantial question of law under Section 27A(3) and (4) of the Wealth Tax Act, 1957 - duty of the High Court to frame the question of law - remittal for framing of substantial question and rehearingSubstantial question of law under Section 27A(3) and (4) of the Wealth Tax Act, 1957 - duty of the High Court to frame the question of law - remittal for framing of substantial question and rehearing - High Court erred in deciding the appeal without framing the substantial question of law as required by Section 27A(3) and (4) of the Wealth Tax Act, 1957, and the matter required remand for framing and rehearing. - HELD THAT: - The Supreme Court examined the impugned judgment and found that the High Court had not formulated the substantial question of law mandated by sub section (4) and had proceeded to decide the appeal without framing such question. Because admission of an appeal under Section 27A is conditional upon the existence of a substantial question of law and the High Court is required to formulate that question, the failure to do so vitiated the appellate process. In the circumstances and having regard to the facts, the appropriate course was to set aside the impugned order and remit the matter to the High Court so that it may frame any substantial question of law, if ariseable, and hear the appeal afresh.Impugned order set aside; matter remitted to the High Court to frame the substantial question of law, if any, and to rehear the appeal.Final Conclusion: Appeal allowed; impugned High Court order set aside and the matter remitted to the High Court for framing of the substantial question of law and fresh hearing; no order as to costs.

Summary order. Delay condoned; applications for substitution allowed; permission to file special leave petitions granted; special leave petitions dismissed.

Summary order. Civil appeal dismissed; no interference called for; no order as to costs.

Right to wear the jewellery as an asset - assessment under section 21(1) of the Wealth-tax Act, 1957 - retrospective amendment of section 5(1)(viii) of the Wealth-tax Act, 1957 by the Finance (No. 2) Act, 1971 - reference to the High Court for decision on a question of law - material difference in trust deed affecting taxabilityRight to wear the jewellery as an asset - assessment under section 21(1) of the Wealth-tax Act, 1957 - retrospective amendment of section 5(1)(viii) of the Wealth-tax Act, 1957 by the Finance (No. 2) Act, 1971 - material difference in trust deed affecting taxability - Whether the right to wear the jewellery is an asset assessable under section 21(1) of the Wealth-tax Act, 1957 in the hands of the trust representing the beneficiary, even after the retrospective amendment of section 5(1)(viii) by the Finance (No. 2) Act, 1971 - HELD THAT: - The High Court had declined to call for the reference, considering the question covered by an earlier decision. The Supreme Court found a material difference between the trust deed in the present case and the trust deed considered in the earlier decision relied upon by the High Court. Because that material difference gives rise to a question of law requiring fresh consideration, the Supreme Court did not decide the substantive taxability issue on the merits. Instead, it held that the question should be examined by the High Court. The Supreme Court allowed the appeals, set aside the orders under appeal insofar as they related to the quoted question, and directed the Income-tax Appellate Tribunal to refer the stated question to the High Court after drawing up statements of case.The appeals are allowed; the orders under appeal are set aside insofar as they relate to the quoted question, and the Tribunal is directed to refer that question to the High Court for consideration after drawing up statements of case.Final Conclusion: The Supreme Court allowed the appeals, declined to decide the substantive question on the merits in view of material differences in the trust deed, set aside the impugned orders insofar as they related to the quoted question, and directed the Tribunal to refer that question to the High Court with statements of case.

Reference to Valuation Officer under section 16A of the Wealth-tax Act, 1957 - binding effect of Valuation Officer's report under section 16A(6) of the Wealth-tax Act, 1957 - acceptance of Valuation Officer's report by the Wealth-tax Officer and consequences for assessments being erroneous and prejudicial to the interests of the RevenueReference to Valuation Officer under section 16A of the Wealth-tax Act, 1957 - Whether a reference made to the Valuation Officer in compliance with directions of the Appellate Assistant Commissioner can be a reference under section 16A of the Wealth-tax Act, 1957 - HELD THAT: - The Supreme Court identified this question of law for determination but did not decide it on merits. Instead, after hearing counsel the Court directed that the Tribunal state a case and refer the question to the High Court for decision. The formulation requires the High Court to examine whether a reference occasioned by directions from an Appellate Assistant Commissioner falls within the statutory mechanism of reference to the Valuation Officer under the Act.Referred to the High Court by direction that the Tribunal state the case for determination of this question.Binding effect of Valuation Officer's report under section 16A(6) of the Wealth-tax Act, 1957 - Whether the Valuation Officer's report obtained on the basis of a reference made as a result of the Appellate Assistant Commissioner's directions is binding on the Wealth-tax Officer under section 16A(6) - HELD THAT: - The Court did not resolve the legal contention on binding effect. It recognised that this specific issue of statutory construction and the legal consequence of the source of the reference raise questions of law requiring authoritative determination. Consequently the matter was directed to be referred to the High Court by a case stated by the Tribunal so that the High Court may decide the legal effect of such a report under section 16A(6).Referred to the High Court by direction that the Tribunal state the case for determination of this question.Acceptance of Valuation Officer's report by the Wealth-tax Officer and consequences for assessments being erroneous and prejudicial to the interests of the Revenue - Whether the Commissioner was correct in concluding that the Wealth-tax Officer was duty bound to accept the Valuation Officer's report as to valuation of assets and that failure to do so rendered assessments erroneous and prejudicial to the Revenue - HELD THAT: - The Supreme Court did not adjudicate the merits of the Commissioner's conclusion. Recognising that the legal question concerns the duty to accept the Valuation Officer's report and the legal consequences for assessments, the Court directed that the Tribunal frame a case and refer the question to the High Court for its decision. The High Court is to determine whether non-acceptance by the Wealth-tax Officer requires treating assessments as erroneous and prejudicial to the Revenue.Referred to the High Court by direction that the Tribunal state the case for determination of this question.Final Conclusion: Appeals allowed; Tribunal directed to state a case and refer the three specified questions of law to the High Court for decision.

Summary order. Civil appeals dismissed and the judgments and orders under appeal affirmed; civil appeals dismissed with costs.

Question of law - Reference to the High Court - Exemption under section 5(1)(iii) of the Wealth-tax Act, 1957 - Tribunal to draw up statement of caseQuestion of law - Exemption under section 5(1)(iii) of the Wealth-tax Act, 1957 - Reference to the High Court - Tribunal to draw up statement of case - Whether a question of law arises on the Tribunal's holding that the assessee is entitled to exemption of the value of the property in its entirety under section 5(1)(iii) of the Wealth-tax Act, 1957, and whether the Tribunal should refer that question to the High Court after drawing up a statement of case. - HELD THAT: - The Court held that a question of law does clearly arise from the Tribunal's conclusion that the assessee is wholly exempt under section 5(1)(iii) notwithstanding that part of the official residence stood let out. The Supreme Court declined to decide the substantive legal question on the merits, particularly in view of the absence of the respondent, and observed that the matter requires determination by the High Court. Consequently the Court set aside the order under challenge and directed that the Tribunal should refer the stated question to the High Court by drawing up a proper statement of case for that reference.Appeals allowed; order under challenge set aside; Tribunal directed to draw up a statement of case and refer the specified question of law to the High Court.Final Conclusion: The Supreme Court found that a question of law arises regarding the entitlement to exemption under section 5(1)(iii) of the Wealth-tax Act, 1957, declined to decide the question on merits, allowed the appeals, set aside the impugned order and directed the Tribunal to draw up a statement of case and refer the question to the High Court.

Computation of intrinsic value of unquoted shares under rule 1D of the Wealth-tax Rules, 1957 - treatment of advance tax shown on assets side of balance-sheet in computing tax payable for clause (ii)(e) of the Explanation to rule 1D - precedential conflict resolved by later Supreme Court decisionComputation of intrinsic value of unquoted shares under rule 1D of the Wealth-tax Rules, 1957 - treatment of advance tax shown on assets side of balance-sheet in computing tax payable for clause (ii)(e) of the Explanation to rule 1D - Whether advance tax shown as an asset in the company's balance-sheet must be deducted from tax payable when determining if provision for tax is in excess of tax payable for computing intrinsic value under rule 1D - HELD THAT: - The High Court upheld the Appellate Tribunal's view in favour of the assessee relying on an earlier decision in L. G. Balakrishnan. This Court held that that decision is no longer good law and that the question is governed by the later decision of this Court in Bharat Hari Singhania v. CWT. Applying the law as stated in Bharat Hari Singhania, the Court concluded that the advance tax shown on the assets side should not lead to the High Court's conclusion; the appropriate legal position favours the Revenue. The appellate challenge is therefore allowed and the High Court's answer for the assessee is set aside.Allowed the appeals; the question is answered in favour of the Revenue under the law laid down in Bharat Hari Singhania.Final Conclusion: Civil appeals allowed; High Court decision reversed and the matter decided in favour of the Revenue in accordance with the later Supreme Court authority.

Question of law - market value of property for wealth-tax assessment - valuation by reference to potential value of land - application of rule IBB of the Wealth-tax Rules, 1957 - reference to High Court for determination of lawMarket value of property for wealth-tax assessment - valuation by reference to potential value of land - application of rule IBB of the Wealth-tax Rules, 1957 - The question whether the Tribunal was justified in holding that the market value of the assessee's right in the property at Hailey Road, New Delhi, was not Rs. 8,00,000 as assessed by the Wealth-tax Officer, and whether potential value of the land could be added or valuation should be made by employing rule IBB, is a question of law to be determined by the High Court. - HELD THAT: - The Supreme Court held that the Tribunal had relied on a High Court decision to exclude potential value of the land from valuation, and that this engagement raised a question of law requiring consideration by the High Court. The Court observed that the assessee's contention - that valuation ought to be determined by employing the provisions of rule IBB of the Wealth-tax Rules, 1957 - must be taken into account by the High Court when answering the referred question on its merits. Consequently, the matter is not finally adjudicated by this Court but is fit for reference to the High Court for authoritative determination of the legal question.The Tribunal's order is set aside and the stated question is directed to be referred to the High Court for determination after a statement of case is drawn up; the High Court is to consider the assessee's submission regarding rule IBB.Final Conclusion: Appeals allowed; the orders under appeal are set aside and the Tribunal is directed to refer the identified question of law to the High Court (with a statement of case) for determination on the merits, with no order as to costs.

Reasonable cause for filing return beyond prescribed period - penalty under section 18(1)(a) of the Wealth tax Act, 1957 - reference to the High Court by the Income tax Appellate Tribunal - calling for a reference of questions of lawCalling for a reference of questions of law - reference to the High Court by the Income tax Appellate Tribunal - The High Court's order declining to call for a reference was set aside and the matter remitted to the Tribunal to draw up a statement of case and refer the questions to the High Court. - HELD THAT: - The Court held that the second question put forward by the Revenue was a question of law and that the first question was consequential upon the reply to that legal question. Because the High Court declined to call for a reference without assigning reasons, the Supreme Court concluded that the High Court's order had to be set aside. The appropriate course directed by the Court was to require the Tribunal to prepare the statement of case and refer the stated questions to the High Court for its opinion.Order of the High Court declining to call for a reference set aside; matter remitted to the Tribunal to draw up a statement of case and refer the questions to the High Court.Penalty under section 18(1)(a) of the Wealth tax Act, 1957 - reasonable cause for filing return beyond prescribed period - Whether the Tribunal was correct in cancelling the penalty under section 18(1)(a) where the return was filed beyond the period of limitation was remitted for the High Court's opinion. - HELD THAT: - The Supreme Court did not decide the merits of whether cancellation of the penalty was correct; instead it treated the question as consequential on the legal issue of whether lack of knowledge of the provisions of law can constitute a reasonable cause for delayed filing. Because the threshold legal question required authoritative determination, the Court directed that this question be referred to the High Court by the Tribunal for consideration.Question remitted to the High Court for opinion; merits of cancellation of penalty to be determined after reference.Reasonable cause for filing return beyond prescribed period - Whether lack of knowledge of the provisions of law constitutes a reasonable cause for filing the return beyond the prescribed period was remitted to the High Court for its opinion. - HELD THAT: - The Supreme Court identified this as a pure question of law that is determinative of the consequential penalty issue. The Court therefore directed that this legal question be referred to the High Court through the Tribunal's statement of case so that the High Court may give its opinion on the legal proposition.Question remitted to the High Court for its opinion; no decision on the legal proposition was made by the Supreme Court.Final Conclusion: Appeals allowed; the High Court's order declining to call for a reference set aside and the two legal questions (on reasonable cause for delayed return and the consequential penalty under section 18(1)(a) of the Wealth tax Act, 1957) are to be referred by the Tribunal to the High Court after drawing up the statement of case; no order as to costs.

Valuation of unquoted shares - interpretation of Rule 1D of the Wealth-tax Rules, 1957 - conflict of precedent between High Court and Supreme Court - binding effect of this Court's earlier decisionValuation of unquoted shares - interpretation of Rule 1D of the Wealth-tax Rules, 1957 - The correctness of directing valuation of unquoted shares of Cadila Laboratories Pvt. Ltd. as per Rule 1D of the Wealth-tax Rules, 1957, in the manner interpreted by the Gujarat High Court in CWT v. Ashok K. Parikh - HELD THAT: - The High Court upheld the Tribunal's direction to value the unquoted shares under Rule 1D relying on its earlier decision in CWT v. Ashok K. Parikh. This Court had previously considered the same issue in Bharat Hari Singhania v. CWT and took a contrary view to that of the Gujarat High Court. Applying the binding precedent of this Court, the appeals were allowed and the High Court's order was set aside.The Tribunal's direction to value the unquoted shares as per Rule 1D insofar as interpreted by the Gujarat High Court was disapproved; the High Court order affirming that direction was set aside following this Court's earlier contrary decision.Final Conclusion: Civil appeals allowed; the High Court's affirmative answer in favour of the assessee (upholding valuation under Rule 1D as interpreted in CWT v. Ashok K. Parikh) reversed in view of this Court's earlier decision in Bharat Hari Singhania v. CWT; order under appeal set aside; no order as to costs.

Value of stock-in-trade - net wealth - wealth-tax liability - question of law - Tribunal to state a case - reference to the High CourtValue of stock-in-trade - net wealth - wealth-tax liability - question of law - Tribunal directed to refer to the High Court the question whether the value of stock-in-trade must be included in net wealth for determining the assessee-company's wealth-tax liability. - HELD THAT: - The Supreme Court, after hearing senior counsel, held that a question of law arises regarding whether stock-in-trade value is to be included in net wealth for wealth-tax computation. Instead of deciding the substantive question on the merits, the Court directed the Tribunal to frame and state the case and refer the specified question of law to the High Court for determination. Special leave was granted and the matter was remitted for that purpose.The Tribunal was directed to state the case and refer to the High Court the question whether the value of stock-in-trade is required to be included in net wealth for assessing the assessee-company's wealth-tax liability; appeals disposed accordingly.Final Conclusion: Special leave granted; the Supreme Court held that a question of law arises and directed the Tribunal to state the case and refer to the High Court the question whether the value of stock-in-trade must be included in net wealth for determining the assessee-company's wealth-tax liability; appeals disposed of on that basis.