AI Drafter 
TaxTMI 
TaxTMI 
TaxTMI 
2019 (8) TMI 5
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.... law. 2. On the facts and in the circumstances of the case the Learned Commissioner Wealth Tax (Appeals) has erred in not allowing the debts owned as against the assessed wealth so upheld, which is otherwise allowable and thus, the order so passed is without jurisdiction, illegal, wrong and bad in law." 2. Briefly stated facts as culled out from the records are that the assessee is an individual running business of trading of bullion under the sole proprietorship concern M/s. Kargil Bullion. He also derives income from trading/commission work of gold/silver trading on MCX/NCDEX. Income of Rs. 2,88,410/- declared in the return of income filed on 21.08.2007 and the same was assessed u/s 143(3) of the Act vide order dated 17.12.2009. 3. During the course of assessment proceedings u/s 143(3) of the Act, Ld. AO while examining the audited financial statement of the proprietorship concern M/s Kargil Bullion noticed that there was 'cash in hand' of Rs. 4,91,38,518/- as on 31.03.2007. As the assessee is an individual entity, Ld. AO applying the provision of u/s 2(ea)(vi) of the Wealth Tax Act held that the cash in excess of Rs. 50,000/- is liable to be included in the total ....
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....troduce such provision is explained in the Memorandum explaining the provisions of Finance Bill 1992, which is reproduced hereunder :- "With a view to stimulating investment in productive assets, it is proposed to abolish wealth-tax on all assets except certain specified assets. The term "asset" will include guest houses and residential houses including farm houses within twenty-five kilometers from the local limits of any municipality (whether known as a municipality, municipal corporation, notified area committee, town area committee, town committee or by any other name) or a cantonment board but does not include a house which has been allotted 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, jewelry, bullion (other than used as stock-in-trade) ; yachts and boats and aircrafts (other than those used for commercial purposes), cash in hand excess of Rs. 50,000 held by in....
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....of Individuals and HUF in excess of Rs. 50,000/- and in other cases any amount not recorded in books of accounts. Please note that in the cases of other than Individuals/HUF i.e. Firm, AOP, Companies etc. are subject to audit and mostly for business purposes. Whereas in the case of Individuals/HUF, where books are not mandatory where source of income may be other than business. In such case an adhoc exemption of Rs. 50,000/- is provided. However, where books of accounts are mandatory, cash in hand is out of purview of the provisions of Wealth Tax Act. Similarly, in section 2(ea) of the Wealth Tax Act, the assets like motor car, jewellery, bullion or furniture which are held by the assessees either for the use of the business or running them on hire or as stock-in-trade are excluded from the ambit of "asset". Even in the case of yachts, boats and aircrafts which are used for commercial purposes are also excluded from the definition of "asset". It is necessary while interpreting clause (vi) which specifically deals with the treatment to be given in respect of cash in hand, the entire definition of "asset" as it was brought on the statute book. It is submitted that n....
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....s, the cash being commercial asset is exempted from Wealth Tax. We also invite your kind attention that wealth-tax is charged on the specific valuation date. That, amount credited in bank accounts are not included in the definition of "asset". Thus, in presuming one day immediately preceding the date of valuation, would have deposited cash in bank accounts and immediately next day i.e. first day of after valuation date, would have withdrawn the same, then such cash could not have been liable for the wealth-tax and it is much more easier for the individuals and HUFs. Though as per the general principles of interpretation where the wordings of a statute are plain, precise and unambiguous, the intention of the legislature is to be gathered from the language of the statute itself and no help of external aid should be taken, but when the statute is not exhaustive or where its language is ambiguous, uncertain, clouded or susceptible of more than one meaning, then certainly the external aid can be taken for finding out the legislative intent. Moreover, if two interpretations are possible then the interpretation in favour of the assessee should be preferred as held by the....
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....nce Sheet having more value reflected in books. Thus, under any circumstances chargeable wealth can never be more than Rs. 28,49,939/-. This position is valid where there is no liability or debt. In the case of debts, representing assets shall be governed by the provisions of section 2(m) of the Wealth Tax Act. The said section is reproduced hereunder :- Section 2(m) 'net wealth' means the amount by which the aggregate value computed in accordance with the provisions of this Act of all the assets, wherever located, belonging to the assessee on the valuation date, including assets required to be included in his net wealth as on that date under this Act, is in excess of the aggregate value of all the debts owed by the assessee on the valuation date which have been incurred in relation to the said assets; Thus, in the instant case sundry creditors and unsecured loans are representing cash and bank balance. In such circumstances, liabilities are more than the amount of cash in hand and thus, not liable for charge of Wealth Tax. Even though if proportionate capital / liabilities are appropriated towards assets then also cash in hand, being chargeable asset with....
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....e Ld. CIT(A) 3. I have gone through the appellant contentions and the order passed u/s 16(3) r.w.s. 17 of the Wealth Tax Act. It is seen that the appellant has made the same submission in the appeal proceedings as were made before the Wealth Tax Officer in the assessment proceedings. The appellant's main contentions is that the cash in hand of Rs. 4,91,38,518/- is not taxable in view of the provisions of section 2(ea)(vi) of the Wealth Tax Act and that the cash in hand belongs to proprietary concern, M/s Kargil Bullion and has been deposited in the bank account on the next working days. The Assessing Officer did not accept the assessee's contention and relied on the decision of Kerala High Court in CIT vs. Smt.K.R. Ushasree (2010) 229 CTR 52 (Ker). 3.1. It is seen that similar view have been taken by the Kerala High Court in the case of A.A.Salam in WTA (1) of 2009 wherein it has been held as under : The question....................Section 2(ea)(vi) of the Act. 3.2. Further, the appellant has not submitted any proof to show that the cash in hand on 31/03/2007 was deposited in the bank account on 03/04/2007, 04/04/2007 and 05/04/2007 and what was ....
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.... is no dispute and the similar set of facts where the cash in hand in the form of business asset held by individual person were subjected to wealth tax, Coordinate Bench Kolkata in the case of Surendra Pal Singh vs. DCWT(I.T.A.T. Kolkata) in WTANo.01/Kol/2017 order dated 08.11.2017 held that cash in hand referred to in Section 2(ea)(vi) of the Act represents only the personal cash of the assessee emanating from his personal balance sheet. It nowhere contemplates the inclusion of cash which is held as business asset. We find that the Kolkata Tribunal has given the above decision after considering the judgment of Hon'ble Kerala High Court in the case of CIT vs. Smt. K.R. Ushasree (supra),observing as follows: 5.We have heard the rival submissions. We find that the assessee had submitted a statement showing computation of global value of assessee's business at Rs. 9,47,580/- as per procedure laid down in Schedule III Rule 14 of the Rules for determining the value of assets. The Ld. CWTA however rejected this argument of the assessee relying on the decision of the Hon'ble Kerala High Court in the case of CIT vs. Smt. K.R. Ushasree reported in 332 ITR 75 (Ker). We find that....