TaxTMI 
TaxTMI 
2009 (1) TMI 430
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....rns filed, form part of the taxable asset under section 2(e) of the Wealth- tax Act on the valuation date? 3. Whether on the facts and in the circumstances of the case, the Tribunal was right in law in holding that while applying the provisions of rule 1BB for valuing the self-occupied property, municipal ratable value has to be adopted instead of standard rent?" 2. Of these, question Nos. 1 and 2 have been referred by the Tribunal at the behest of the assessee whereas question No. 3 has been referred at the behest of Revenue. 3. As regards question No. 1, the making of a compulsory deposit was mandated in respect of persons specified in section 3 of the Compulsory Deposit Scheme (Income-tax Payers) Act, 1974 (hereinafter referred to as the "said Act"). The said Act was enacted in the interest of national economic development and section 4 required persons as specified and whose annual income exceeded Rs. 15,000 to make a compulsory deposit at the rates specified in the Schedule to the Act. Section 7 of the said Act laid down that every compulsory deposit would carry a simple rate of interest, which would be equal to the bank deposit rate. Section 8 of the Act provid....
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....pted under section 2(e)(2)(ii). It was contended that the aforesaid two judgments of this court were delivered only on the footing that under section 2(e) the term "asset" included properties of every description, movable or immovable but did not consider whether such compulsory deposit could be said to be an annuity exempted under section 2(e)(2)(ii). 6. Counsel for the applicant brought to our notice the conflicting judgments of various other High Courts on this issue. He first brought to our notice a judgment of the Allahabad High Court in the case of Udai Chand Jain v. CIT reported in [1997] 228 ITR 190 in which the single judge of the Allahabad High Court took the view that the deposit in the Compulsory Deposit Scheme under the said Act amounted to annuity within the meaning of section 2(e)(2)(ii). While deciding the case the Allahabad High Court considered the meaning of the word "annuity" as given by the Supreme Court in CWT v. P. K. Banerjee [ 1980]125 ITR 641, wherein the apex court held that "annuity" was a payment to be made periodically and should be a fixed or predetermined. The Allahabad High Court held that the petitioners were entitled to receive back the said am....
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.... five years, after the lapse of two years of deposit, it cannot be treated as an annuity because it is related to a fixed proportion of capital. Further, the rate of interest is fixed every year and not only that there is a right to vary the rate of interest but also as a fact the rate of interest has been varied from year to year. Therefore, the only fixed part of the Compulsory Deposit Scheme repayment is the one-fifth of the deposits actually made by the assessee and that is not variable though the interest part is a variable sum and is actually varied from year to year. Therefore, on the ratio of this ruling, the deposit in the Compulsory Deposit Scheme cannot be called an annuity. That apart, the repayment of the instalment due on April 1, 1985, on both principal and interest was postponed by one year by the statute. That indicates that Parliament did not treat it as an annuity because the very fact that repayment for one year was denied to the recipients would be against the concept of the annuity itself. It may be mentioned that by the Finance (No. 2) Act, 1980, section 7A was inserted in the Compulsory Deposit Scheme Act, 1974, with effect from April 1, 19....
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....not become pay able to the assessee. The claim for refund has to be assessed when the assessment of the return is done by the Assessing Officer. He may refuse or reduce the claim. Till he performs this exercise, the refund, if any, remains an unquantified sum. The advocate for the assessee relied upon a judgment of this court in the case of Estate of Late Gen. Sir Shankar S. S. J. B. Rana v. CED reported in [1990] 186 ITR 578 (Bom) In the said case, the question which was referred under the Estate Duty Act was (page 579): "Whether, on the facts and circumstances of the case, income-tax refund of Rs. 13,69,092 payable to the deceased was includible in the estate of the deceased, though it was received after the deceased's death, by the accountable person?" This court after referring to several judgments of various High Courts answered the said question in the negative and in favour of the account able person. We note that in the case of CWT v. Arvindbhai Chinubhai [1982] 133 ITR 800, the Gujarat High Court took the view that when assessment proceedings are pending on the valuation date, even assuming that there was likelihood of refund in the future and the likely am....
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....a sum equal to ten per centum of the said annual rent, and the said deduction shall be in lieu of all allowances for repairs or on any other account whatever." (emphasis provided) 12. Under the Bombay Municipal Corporation Act, 1888, rateable value is calculated under section 154(1) and the relevant portion of the section is in the following terms: "154. Rateable value how to be determined. - (1) In order to fix the rateable value of any building or land assessable to a property tax, there shall be deducted from the amount of the annual rent for which such land or building might reasonably be expected to let from year to year a sum equal to ten per centum of the said annual rent and the said deduction shall be in lieu of all allowances for repairs or on any other account whatever." 13. The advocate for the assessee relied upon the judgment of the Calcutta High Court in the case of CIT v. Prabhabati Bansali [1983] 141 ITR 419. In that case, the Tribunal had directed the Income-tax Officer to determine the annual value of the property afresh with reference to its rateable value as determined by the municipal corporation. In a reference, the Calcutta High Court....