Business cash held by a proprietorship is a valuation asset, not a separate taxable personal asset under wealth tax rules.

Cash held by a proprietorship concern was treated as a business asset, not personal cash, because it formed part of the proprietary business balance sheet and had to be valued on a global basis under Rule 14 of Part D of Schedule III. Inclusion of such business cash as a separate taxable asset under section 2(ea)(vi) would defeat the prescribed method of valuation, so the addition to net wealth was deleted.

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Issues: Whether cash in hand belonging to a proprietorship concern was includible in the assessee's net wealth under section 2(ea)(vi) of the Wealth Tax Act, 1957, or whether it was to be treated as a business asset valued under Rule 14 of Part D of Schedule III.

Analysis: The cash represented funds of the proprietary business and was not personal cash reflected in the assessee's individual balance sheet. The valuation of business assets was required to be undertaken on a global basis under Rule 14 of Part D of Schedule III, and inclusion of business cash as a separate taxable asset under section 2(ea)(vi) would defeat that method of valuation. The cash in hand forming part of the business balance sheet was therefore a business asset and not the kind of personal cash contemplated by section 2(ea)(vi).

Conclusion: The addition of the business cash to net wealth was deleted and the issue was decided in favour of the assessee.

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