TaxTMI 
TaxTMI 
2009 (7) TMI 834
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.... order of the Tribunal holding that cash in hand in excess of Rs. 50,000 in the hands of the assessees who are all individuals, does not form part of the asset under section 2(ea)(vi) of the Wealth-tax Act. We have heard senior counsel Sri P. K. R. Menon appearing for the appellants and various counsel appearing for the respondents. 2. All the respondent-assessees are individuals who have, in the books of account, cash in hand on the valuation date, in the case of some of the assessees, above Rs. 30 lakhs, in some cases above Rs. 50 lakhs and in few cases it is above a crore of rupees and in one case cash in hand held by an individual assessee is as much as Rs. 2.6 crores. According to the assessees all of them are engaged in business an....
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....alth-tax Act was amended by the Finance Act, 1992 to implement the recommendations of the Chelliah Committee. The Committee's recommendations are extracted in the Budget Speech of the Finance Minister, the relevant portion of which is extracted hereunder (194 ITR (St.) 1, 21) : "67. The Wealth-tax Act, 1957, has far too many exemptions making its administration enormously complicated. The valuation of certain assets such as shares also presents problems, since very high market values reflecting speculative activity can lead to a heavy burden on shareholders who are long-term investors. There is also no distinction at present between productive and non-productive assets. The Chelliah Committee has suggested that in order to encourage the ....
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....d by a company to an employee or an officer, or a director who is in the whole time employment, having a gross annual salary of less than two lakh rupees. It will also not include a house for residential purposes which forms part of stock-in-trade. Further it will include motor cars other than those used in the business of running them on hire or which form part of stock-in-trade; jewellery, bullion, furniture utensils or any other articles made wholly or partly of gold, silver, platinum or any other precious metal or any alloy containing one or more of such precious metals (other than those used as stock-in-trade) ; yachts and boats and aircrafts (other than those used for commercial purposes), cash in hand in excess of Rs. 50,000 of indiv....
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....rliament based on the recommendations of the Chelliah Committee, identified non-productive assets and classified the same under the new definition clause (ea) introduced to section 2 providing for wealth-tax only on such of the assets enumerated in the sub-clauses provided under the said section with effect from April 1, 1992. In other words, while the provisions of the Wealth-tax Act, prior to the amendment by the Finance Act, 1992, described and named items of assets excluded from tax, after the amendment, the assets which are subject to wealth-tax are specifically identified and earmarked by Parliament in the sub-clauses contained in section 2(ea) of the Act. Keeping this in mind, we have to identify what are the "assets" covered by the ....
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....rded in the books of account by the respondents-assessees, who are businessmen, has to be excluded from the scope of "assets" because cash in hand is a productive asset. We do not think this argument is tenable because there is no provision in the definition clause or in any other section of the Act authorising the Wealth-tax Officer to exclude cash in hand if it is found to be a productive asset. Even though the Chelliah Committee recommended levy of wealth-tax only on non-productive assets, Parliament has instead of leaving the matter for adjudication in the case of every assessee and every asset, proceeded to identify non-productive assets and brought all such assets within the definition clause for the purpose of wealth-tax. In other wo....