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TaxTMI 
TaxTMI 
TaxTMI 
2009 (2) TMI 134
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.... the closing stock of M/s. Rawat Jewellers, Jaipur, exceeded the value as shown in the firm's accounts by more than 20 per cent ? (2) Whether, on the facts and in the circumstances of the case, the Tribunal was right in upholding the findings of the Appellate Assistant Commissioner that the firm M/s. Rawat Jewellers, Jaipur, is an industrial undertaking within the meaning of the Explanation to section 5(1) (xxxi) and consequently in holding that the value of the assessee's interest in that firm is exempt under section 5(1)(xxxii) of the Wealth-tax Act, 1957 ?" (2) D. B. Wealth-tax Reference No. 5 of 1988: "(1) Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that for the purpose of applying rule 2B(2) of the Wealth-tax Rules, the onus was on the Revenue to prove that the market value of the closing stock of M/s. Rawats Bombay exceeded the value as shown in the firm's accounts by more than 20 per cent. ? (2) Whether, on the facts and in the circumstances of the case, the Tribunal was right in upholding the findings of the Appellate Assistant Commissioner that the firm M/s. Rawats Bombay is an industrial undertaking within the meaning ....
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....988: (1) Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the firm M/s. Maliram Puranmal is an industrial undertaking within the meaning of Explanation to section 5(1)(xxxi) and consequently in holding that the value of the assessee's interest in that firm is exempt under section 5(1) (xxxii) of the Wealth-tax Act, 1957 ? (2) Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that for the purpose of applying rule 2B(2) of the Wealth-tax Rules, the onus was on the Revenue to prove that the market value of the closing stock of M/s. Maliram Puranmal exceeded the value as shown in the firm's accounts by more than 20 per cent. ?" (7) D. B. Wealth-tax Reference No. 65 of 1988: "Whether, on the facts and in the circumstances of the case, the Tribunal was justified in directing the Wealth-tax Officer to arrive at the value of the immovable property by applying rule 1BB and further in directing if the value arrived at by applying rule 1BB does not exceed the value as per the books by 20 per cent. than he shall not apply rule 2B(2) in respect of immovable property ?" (8) D. B. Wealth-tax Referen....
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....gross profit cannot be the only basis for invoking the provisions of rule 2B(2) of the Wealth-tax Rules ?" (12) D. B. Wealth-tax Reference No. 32 of 1990: (1) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that rule 2B(2) of the Wealth-tax Rules cannot be invoked in the case of the assessee for valuing the closing stock only on the basis of gross profit rate declared by the assessee in the year ? (2) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding the firm (M/s. Jewels Emporium, Jaipur), in which the assessee is a partner, as an industrial undertaking and also holding that the assessee's interest in the firm is exempt under section 5(1)(xxxii) of the Wealth-tax Act, 1957 ?" (13) D. B. Wealth-tax Reference No. 38 of 1990: "Whether, on the facts and in the circumstances of the case, the Tribunal is justified in holding that the firm M/s. Bhuramal Rajmal Surana (Mfrs.) is an industrial undertaking within the meaning of section 5(1) (xxxi) and consequently the value of the assessee's interest in that the firm is exempt under section 5(1) (xxxii) of the Wealth-tax Act, 1957 ?" (14)....
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....taking ?" (18) D. B. Wealth-tax Reference No. 8 of 2003: "Whether, on the facts and circumstances of the case, the learned Income-tax Appellate Tribunal was right in holding that the firm M/s. Kotawala is an industrial undertaking within the meaning of Explanation to section 5(1)(xxxi) of the Wealth-tax Act, 1957, and consequently in holding that the value of the assessee's interest in that firm is exempt under section 5(1) (xxxii) of the Wealth- tax Act, 1957 ?" (19) D. B. Wealth-tax Reference No. 14 of 1990: "Whether, on the facts and in the circumstances of the case, the Tribunal was correct in law in holding that gross profit cannot be the only basis for invoking the provisions of rule 2B(2) of the Wealth-tax Rules ?" 2. The following reference applications have been preferred by the Revenue seeking to issue directions to the Tribunal to refer the following questions of law to the court for its opinion: (1) D. B. Wealth-tax Reference Application No. 20 of 1988: "Whether, on the facts and in the circumstances of the case and in law, the Tribunal was justified in holding that the provisions of rule 2B(2) of the Wealth-tax Rules were not applicable for determination of the ....
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....hether, on the facts and in the circumstances of the case, the Tribunal was right in not holding that the assessee is not entitled to exemption under section 5(1) (xxxii) of the Wealth-tax Act, 1957, in respect of investment in the firm M/s. Cosmopolitan Trading Corporation, Jaipur ?" (6) D. B. Wealth-tax Reference Application No. 140 of 1988: "(1) Whether, on the facts and in the circumstances of the case the Wealth-tax Officer has not discharged the burden of proof to establish that the value of stock as disclosed in the balance-sheet of the firm in which the assessee is a partner exceeded by more than 20 per cent.? (2) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the provisions of rule 2B(2) of Wealth-tax Rules, 1957, were not applicable to the assessee's case and consequently in deleting the addition made by the Wealth-tax Officer ?" (7) D. B. Wealth-tax Reference Application No. 144 of 1988: "(1) Whether, on the facts and in the circumstances of the case, does the gross profit rate taken in the case of the firm, constitute adequate material to come to the conclusion that market value of the closing stock of the fir....
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....sessee found that the firm has declared gross profit above 20 per cent. in the accounts relating to the precious and semi-precious stones. The Wealth-tax Officer was of the view that rule 2B(2) of the Wealth-tax Rules, 1957, was applicable and the value of the closing stock would exceed the book value by a margin of more than 20 per cent. The assessee contended before the Wealth-tax Officer that the rate of gross profit did not establish the value of the closing stock, therefore, rule 2B(2) has no application. It was also the plea of the assessee that the business in precious stones was of a particular type and a part of the stock may not be at all saleable. The Wealth-tax Officer did not accept the plea of the assessee and was of the view that the gross profit rate was to be the average of the transactions as good indicator of the market value of the closing stock. He was further of the view that since there was no evidence on record to support the contention of assessee that a part of this stock may not be saleable, the Wealth-tax Officer observed that the overall market value has to be adopted and it could not be taken as nil. The Wealth-tax Officer, therefore, applied rule 2B(2....
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....references can be decided in terms of the mandate contained in the judgment delivered by the Supreme Court in the case title Juggilal Kamlapat Bankers v. WTO reported in [1984] 145 ITR 485 (SC); [1984] 1 SCC 571. We have examined the reference applications dealt with by the Full Bench. The dispute referred to by the Division Bench to be decided by the Full Bench was because of the divergent views of Division Benches, whether the references could be declined to be referred by the Tribunal to the court for its opinion. The Revenue framed questions/references and referred to the Tribunal for its reference to the High Court for its opinion. The Tribunal declined to refer the reference made by the Revenue to the High Court. Under such circumstances, an application was filed before this court seeking direction for reference of the dispute to the court. The issue before the Full Bench was as to whether the reference which has been declined to be referred by the Tribunal should have been referred. The Full Bench, in stead of this, relying upon the judgment of Juggilal Kamlapat Bankers v. WTO reported in [1984] 145 ITR 485 (SC) ; [1984] 1 SCC 571 observed as under (page 570 of 276 ITR): "6....
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....l or discernible principle justifying computation of the percentage of deduction at the figure applied, it has to be held that there is no positive material to hold that the market value exceeds by more than 20 per cent. the value of the closing stock disclosed in the balance-sheet even though the gross profit rate appears to exceed the figure of 20 per cent… It is obvious from the above conclusion that the condition precedent for the applicability of rule 2B(2) is not satisfied and that the Tribunal was, therefore, justified in holding that rule 2B(2) could not be invoked. In short, the burden was on the Revenue to prove that the valuation of the closing stock given in the balance-sheet was not the true value and that the market value of the closing stock exceeded the valuation disclosed by more than 20 per cent. It is only after this burden had been discharged by the Revenue by determining the market value under section 7(2)(a) at an amount exceeding the valuation disclosed in the balance-sheet by more than 20 per cent. on the basis of positive or relevant material that rule 2B(2) could be invoked. Since even the very first step had not been reached in the present case, the qu....
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....person who is doing the work and in each such case, the question of control and supervision is a question of fact. We accordingly after looking into the material before us find that the employer in these cases carried out a strict supervision over the commodity having regard to the value thereof. He is vigilant in respect to the commodity alone and due control and supervision on the work of the karigars is not there which is supported by the facts brought out hereinafter. The activity of ghat making, also known as shaping is performed by the skilled workers. They are independent workers and do not work whole time for the assessee's firm alone. The employers do direct them about the work to be done by them but they do not have any control over the manner and method of doing the work by these karigars nor do they exercise any discipline in reporting for the work. The karigars are free to report to work or abstain from doing the work. The job performance is done according to the will and wisdom of the worker though a constant vigil of the employer remains on the commodity. We did ask Shri Dhadda, the counsel for the respondent on the four indicia of contract of service as pointed out ....
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....e adopted. The provisions of the Wealth-tax Act also do not require the entire activity to be carried out by the assessee himself nor is there any requirement that the activity of processing should be dominant where the assessee carries a trading as well as processing of goods for becoming eligible for exemption. The only requirement is that the assessee's firms should be engaged in the business of manufacture or processing of goods. Keeping in view the nature of activity it even need not own any machinery himself. In view of these findings and as the respondent-assessee is engaged in the processing of goods within the meaning of the Explanation to clause (xxxi) of sub-section (1) of section 5 of the Wealth-tax Act, we hold that the assessee is an industrial undertaking entitled for exemption under section 5(1) (xxxii) of the Act and accordingly uphold the conclusion arrived at by the learned Commissioner of Income-tax (Appeals) though for different reasons.' 20. We have been informed by the counsel for the assessee that to his knowledge this judgment has attained finality having not been challenged. The counsel for the Revenue could not show us to the contrary. 21. In Vimal Chan....