Patna H.C : Whether, on the facts and in the circumstances of the case, the intangible additions made in the income-tax proceedings could be treated as the assets of the assessee for the purpose of wealth-tad assessment in the light of the provisions of s. 2(e) and (m) of the WT Act, 1957 ?

Counsel Appeared

K. Vidyarthi & B. K. Sharan, for the Revenue : None appeared, for the Assessee

BY THE COURT :

By this reference under s. 27(1) of the WT Act, 1957 (hereinafter referred to as the “Act”), the Tribunal has referred the following question of law to this Court for its opinion :

“Whether, on the facts and in the circumstances of the case, the intangible additions made in the income-tax proceedings could be treated as the assets of the assessee for the purpose of wealth-tad assessment in the light of the provisions of s. 2(e) and (m) of the WT Act, 1957 ?”

The material facts giving rise to this reference, briefly, are as follows : The assessee is an individual. While framing the assessment of the assessee under the Act for the year 1976-77, the WTO hold that intangible additions made in assessees under the IT Act represented assets in the shape of cash and as the assessee had failed to explain that the amount was spent, the intangible additions were includible in the net wealth of the assessee and the assessee was assessed accordingly. The appeal preferred by the assessee in this behalf was dismissed. On further appeal before the Tribunal, the Tribunal deleted that additions.

Aggrieved by the order passed by the Tribunal, the Revenue sought reference and it is at the instance of the Revenue that the aforesaid question of law has been referred to this Courts for its opinion. None appeared on behalf of the assessee. Learned counsel for the Revenue brought to our notice that the matter arising in this reference is governed by a decision of this Court in CWT vs. Mishrilal Jain (1986) 161 ITR 583. A Division Bench of this Court in that case has held that the intangible additions made in the income-tax assessment an assessee are part of his real income and are includible in the net wealth of the assessee on the relevant valuation dates in view of the provisions of s. 2(e) and (m) of the Act, unless it was found that the intangible additions were not available with the assessee on the relevant valuation dates. Following that decision, with which we respectfully agree, our answer to the question referred to this Court is that, on the facts and in the circumstances of the case, the intangible additions made in the income-tax proceedings could be treated as the assets of the assessee for the wealth-tax assessments in the light of the provisions of s. 2(e) and (m) of the WT Act, 1957. The reference is answered accordingly. In the circumstances of the case, parties shall bear their own costs.

Let a copy of this judgment be forwarded by the officer of this Court to the Assistant Registrar, Tribunal, Patna.

[Citation :182 ITR 230]