2002 (9) TMI 64 - HC - Income Tax

Inclusion of Motor Cars in Net Wealth for Tax Assessment Upheld by High Court

The High Court of Madras held that motor cars held as stock-in-trade are to be included in an assessee's net wealth for wealth-tax assessment, despite ... Whether on the facts and in the circumstances of the case, the Appellate Tribunal was right in law in holding that the value of motor cars is not includible in the net wealth as they have been held as stock-in-trade by the assessee? - The words used in section 40(3) of the Finance Act, 1983, as they stood in this assessment year, do not permit the exclusion of stock-in-trade from the list of assets to be valued for the purpose of wealth-tax. Though the assessee is a dealer in motor cars and held some of the cars as stock-in-trade, in view of the specific provision for valuing motor cars as part of the taxable wealth, the valuation of those cars for the purpose of levying tax was rightly done by the Assessing Officer. The Tribunal was in error in holding that the cars could not have been assessed at all. - The question referred to us is, therefore, answered in favour of the Revenue and against the assessee. The High Court of Madras ruled that the value of motor cars held as stock-in-trade by an assessee must be included in the net wealth for wealth-tax assessment, even though the cars were specifically listed in the Finance Act. The Tribunal's decision to exclude the cars from assessment was deemed incorrect. The case was remitted to the Tribunal to determine the value of cars sold during the assessment year.