High Court Of Madras
Commissioner Of Wealth Tax vs. T.V. Sundaram Iyengar & Sons Ltd.
Section WT 7
Asst. Years 1988-89, 1989-90, 1990-91, 1991-92
P.D. Dinakaran & P.P.S. Janarthana Raja, JJ.
Tax Case (Appeal) Nos. 1027 to 1030 of 2005
24th January, 2006
Counsel Appeared : Mrs. Pushya Sitaraman, for the Appellant
JUDGMENT
P.P.S. Janarthana Raja, J. :
The present appeals are filed under s. 27A of the WT Act, 1957 by the Revenue, in WTA Nos. 208/Mad/1993, 209/Mad/1993, 1215/Mad/1993 and 354/Mad/1994, passed by the Tribunal, Madras, ‘D’ Bench raising the following substantial question of law : “Whether, in the facts and circumstances of the case, the Tribunal was right in holding that the WDV of the cars and jeeps owned by the assessee should be taken as the market value for the purposes of wealth-tax ?”
2. The facts leading to the above question of law are as under :
(i) The assessee-respondent is a company in which public are not substantially interested. By virtue of the amendment in WT Act, the assessee-respondent has become an assessable entity for wealth-tax. By filing a return, the assessee admitted only WDV of the cars and jeeps, as the market value. The AO held that the insured value of the vehicles as furnished by the assessee should be taken as the current market value. Aggrieved by the order, the assessee filed an appeal to the CIT(A). The CIT(A) directed the AO to adopt the following method to arrive at the market value of the vehicles. For the vehicles purchased before the last quarter but during the relevant previous year, 90 per cent of the cost of acquisition should be taken as the market value. In respect of the vehicles which are owned by the assessee for more than 1 year but less than 5 years, as on the relevant valuation date, 75 per cent of the cost of acquisition should be taken as the market value. Similarly, for vehicles which are owned by the assessee for more than 5 years, but less than 15 years, 60 per cent of the cost of acquisition should be to the fair market value. The vehicles which are owned by the assessee for more than 15 years but less than 25 years, 50 per cent of the cost should be the market value and in respect of all the other vehicles, 40 per cent of the cost should be taken as the fair market value. (ii) Aggrieved by the order, the assessee filed an appeal to the Tribunal. The Tribunal followed the earlier order and held that the book value should be taken as the fair market value for the purpose of wealth-tax. The learned counsel for the Revenue submitted that the WDV of the vehicles should not be taken as the market value, for wealth-tax purpose. Further it was submitted that the CIT(A) had reached a via media between the insured value and the WDV and had worked out a method of calculation which ought not to have been disturbed.
We heard the arguments. In this case, what is shown in the books was offered for wealth-tax assessments. The AO had merely adopted the insured value of the vehicles as the market value. The AO ought to have determined the market value for each vehicle, instead of merely adopting the value which was offered to the insurance company by the assessee. The AO did not do anything except adopting the value offered to the insurance company, as the market value. As to what should be the value of the asset is essentially a question of fact, especially when the Tribunal had adopted the WDV as market value in the earlier assessment years in assessee’s own case. No material is produced before us by the Revenue to show that the WDV does not represent the market value of the vehicle. In view of the foregoing conclusions, we find no error in the order of the Tribunal and hence no substantial question of law arises for consideration of this Court. Hence, the above tax cases are dismissed. No costs. Consequently, the connected TCMP Nos. 750 to 753 of 2005 are closed.
[Citation : 289 ITR 284]
