1994 (12) TMI 23

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....n of the shares of Surat Cotton Spg. and Wvg. Mills Ltd., held by the Gargiben Trust, in which the assessee has reversionary interest, under rule 1D of the Wealth-tax Rules, 1957, the amount of advance tax paid by the company should not be deducted from the amount shown as provision for taxation in the balance-sheet of the company ? 2. Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that compulsory deposit is not an asset within the meaning of section 2(e) of the Wealth-tax Act, 1957 ? " The first question is covered by the decision of the Supreme Court in the case of Bharat Hari Singhania v. CWT [1994] 207 ITR 1. Following the same, it is answered in the negative and in favour of t....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....Having regard to its above conclusion, the Tribunal did not decide the contention of the Revenue that the Appellate Assistant Commissioner erred in law in directing the Wealth-tax Officer to compute the value of the compulsory deposit on actuarial basis. The Revenue sought for reference under section 27(1) of the Act, and, accordingly, the Tribunal has referred the two questions set out above to this court for opinion. The controversy in this case revolves round the interpretation of the expression " assets " which has been defined in clause (e) of section 2 of the Wealth-tax Act, 1957 (" the Act "). The question is whether the amount standing to the credit of the assessee in the Compulsory Deposit Scheme Account is an " asset " within t....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

...., there is no reason why this word should not be given a liberal or wide connotation and should not be extended to those well-recognised types of interest which, have the insignia or characteristic of proprietary right. Compulsory deposit was made in this case by the assessee under the Compulsory Deposit Scheme, 1963, and the scheme framed thereunder. This Scheme was enacted to provide for the making of compulsory deposits at the rates provided in the scheme framed thereunder by certain categories of persons specified therein. The deposit made under the said scheme did bear simple interest at the rate of four per cent. per annum. The deposit so made in any year was repayable with interest thereon at any time after the expiry of five years f....