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of <h1>ITAT allows appeals, deems CWT's order unsustainable, directs WTO to allow deduction under s. 35</h1> <h3>LATE MULJIBHAI C. MEHTA, L/H DINESH M. MEHTA. Versus COMMISSIONER OF WEALTH TAX.</h3> LATE MULJIBHAI C. MEHTA, L/H DINESH M. MEHTA. Versus COMMISSIONER OF WEALTH TAX. - TTJ 022, 481, Issues:- Appeal against order of CWT under s. 25(2) of the WT Act- Validity and correctness of the order by CWT- Dismissal of appeal by AAC- Jurisdiction of CWT in passing order under s. 25(2)- Allowability of liability of Rs. 2,22,032- Action of WTO in deleting the allowance under s. 35Analysis:1. The judgment involves two appeals by the assessee for the assessment year 1976-77. One appeal is against the order of the CWT under s. 25(2) of the WT Act, and the other is against the order of the CWT(A). The original assessment did not include the value of land at Saki Naka initially, but it was later added by the WTO under s. 35 of the Act, withdrawing a deduction of Rs. 2,22,032 claimed by the assessee.2. The CWT initiated proceedings under s. 25(2) regarding the deduction of Rs. 2,22,032 after it had been deleted by the rectification order under s. 35. The CWT set aside the assessment order, leading to an appeal by the assessee challenging the validity and correctness of this decision.3. The ITAT held that the rectification order had already corrected the assessment by deleting the deduction, making the assessment order as rectified final. The CWT had no jurisdiction to pass an order under s. 25(2) as the deduction did not exist on the date of the notice. The order under s. 25(2) was deemed wholly unsustainable.4. The ITAT further ruled that the liability of Rs. 2,22,032 should have been allowed as it was considered an allowable deduction based on prior assessment years. The Tribunal's previous order and dismissal of the application for reference supported the allowability of this liability.5. Regarding the appeal arising from the order under s. 35, the ITAT found that the AAC had previously allowed the liability in appeals for other assessment years, indicating no apparent mistake on the face of the record. The WTO was directed to allow the deduction of the said amount, overturning the deletion made under s. 35.6. Ultimately, both appeals by the assessee were allowed, emphasizing the allowability of the liability and the lack of jurisdiction in the actions taken by the CWT and WTO in deleting the deduction.
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