High Court Of Madras
Commissioner Of Wealth Tax vs. R. Ramanthan Chettiar
Section WT 7
Asst. year 1977-78
R. Jayasimha Babu & K. Gnanaprakasam, JJ.
T.C. No. 1280 of 1988
16th November, 2000
Mrs. Chitra Venkataraman, for the Applicant : P.P.S. Janardhana Raja, for the Respondent
R. JAYASIMHA BABU, J. :
The Tribunal has merely followed the law laid down by this Court in the case of S. Abdul Rahman vs. CWT 1978 CTR (Mad) 340 : (1979) 117 ITR 570 (Mad) : TC 63R.179. The Tribunal has remitted the matter to the AO to determine the real rate of exchange of the Ceylon rupees into Indian rupees for the purpose of determining the extent to which deposit held in Ceylon in Ceylon rupees by the assessee, and after conversion into Indian rupees should be included in the wealth-tax assessment of the assessee for the asst. yr. 1977-78. This Court in the case of Abdul Rahman (supra) has held that there is nothing in s. 7(1) of the WT Act dealing with the valuation of assets which indicates that only the remittable value of the asset in a foreign country has to be included in the net wealth, and though normally, the value of money in legal currency would be that value which is equivalent at the official rate of exchange, it would be open to an assessee to prove that the official exchange rate does not reflect the realistic exchange value or that it was not fixed with reference to convertibility of the currency. The Court held that it would be open to the assessee to prove that official rate is not the realistic exchange rate and remitted the matter to enable the assessee to reduce evidence. In the case before us the Tribunal has remitted to the WTO for a decision afresh after determining the real exchange rate. If the assessee were to adduce any evidence on that aspect. There is no error in that order, the same being in conformity with the law laid down by this Court.Needless to say in case of assesseeâs failure to place acceptable evidence about the real exchange rate which is different from the official exchange rate, the rate to be adopted would be the official rate only. The question referred to us regarding to correctness of the order made by the Tribunal is answered in favour of the assessee and against the Revenue.
[Citation : 248 ITR 315]