2005 (7) TMI 38

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....tax Act, 1957, hereinafter referred to as "the Act", for opinion to this court: "Whether, in law and on facts of the case the Income-tax Appellate Tribunal was justified in excluding the amount deposited under C.D.S. from the net wealth of the assessee?" The present reference relates to the assessment year 1978-79. Briefly stated the facts giving rise to the present reference are as follows: T....

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.... appeal before the Tribunal. Before the Tribunal apart from raising the question about valuation of jewellery, the respondent-assessee also raised an additional ground that the amount standing to the credit in the compulsory deposit scheme is to be excluded from the taxable wealth under section 2(e)(2)(ii) of the Act. The Tribunal following the decision of the Delhi Bench of the Tribunal in the ca....

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....company for the maximum prescribed limit of Rs. 1.5 lakhs which exemption has been allowed in full by the assessing authority. Sri R.S. Agrawal, learned counsel for the respondent-assessee, however, submitted that the respondent-assessee was required to deposit the amount in the compulsory deposit scheme in accordance with the statutory enactment. As it was not out of free volition therefore, it ....

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....(ii) of the Act. This court in W.T.R. No. 121 of 1987, S. N. Agarwal v. CWT, decided on December 22, 2004, has held that the amount standing to the credit of the assessee under the compulsory deposit scheme cannot be treated as an annuity under section 2(e)(2)(ii) of the Act. Further by the Finance (No. 2) Act of 1980, section 7A was inserted in the Compulsory Deposit Scheme (Income-tax Payers) Ac....