High Court Of Madras
Commissioner Of Wealth Tax vs. Reliance Motor Co. Ltd.
Sections 1983FA 40(3)(vii)
Asst. Year 1984-95
R. Jayasimha Babu & K. Raviraja Pandian, JJ.
Tax Case No. 60 of 1997
5th September, 2002
T.C.A. Ramanujam, for the Applicant : R. Meenakshisundaram, for the Respondent
R. Jayasimha Babu, J. :
The question referred to us for our consideration, at the instance of the Revenue, is as to whether on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the value of motor cars is not includible in the net wealth as they have been held as stock-in-trade by the assessee ?
The assessment year is 1984-85.
The provisions of the WT Act as amended by s. 40 of the Finance Act, 1983, as they stood in that assessment year, specifically provided for inclusion of the value of the motor cars in the assets of the an assessee for the purpose of the assessment under the WT Act. That was provided for in s. 40(3)(vii) of the Finance Act, 1983. There was no provision made therein for excluding the value of the stock-in-trade.
The assessee, which is a dealer in motor cars, claimed that the value of the cars, which were its stock-in-trade could not be included in the wealth-tax assessment. The CWT as also the Tribunal held that the stock-in-trade cannot be subjected to wealth-tax even when the asset viz., the motor car had been specifically enumerated in s. 40(3) of the Finance Act, 1983.
The language used in the provision must be given its plain meaning though the section was amended subsequently late in the year 1989, to exclude the value of stock-in-trade. That amendment was not given retrospective effect so as to benefit the assessees in this assessment year. A benefit subsequently given by way of an amendment cannot on that score alone be regarded as having been already given. Unless de hors that amendment, the provision is capable of being read and understood as taking within its fold what was subsequently brought in by way of an amendment.
The words used in s. 40(3) of the Finance Act, 1983, as they stood in this assessment year, do not permit the exclusion of stock-in-trade from the list of assets to be valued for the purpose of wealth-tax. Though the assessee is a dealer in motor cars and held some of the cars as stock-intrade, in view of the specific provision for valuing motor cars as part of the taxable wealth, the valuation of those cars for the purpose of levying tax was rightly done by the AO. The Tribunal was in error in holding that the cars could not have been assessed at all.
The question referred to us is, therefore, answered in favour of the Revenue and against the assessee. Learned counsel for the assessee brings to our notice that the CWT as also the Tribunal had not gone into the claim made by the assessee that some cars were sold during the assessment year and, therefore, the value of those cars should have been excluded. We find substance in that submission, having perused the order of the Tribunal and of the CWT. We, therefore, remit the matter to the Tribunal to determine the number of cars which were held by the assessee for the purpose of sale and work out the value thereof, after taking note of the sales actually effected during the assessment year and also the cars for which the assessee had received the full value in that year.
[Citation : 260 ITR 571]