COMMISSIONER OF WEALTH TAX ORISSA BHUBANESHWAR Vs. VYSYARAJU BADREENARAYANA MOORTHY RAJU BERHAMPUR GANJAM

JUDGEMENT

(1.) These references under S. 27(1) of the Wealth-tax Act, 1957 have been made by the Income-tax Appellate Tribunal, Cuttack Bench at the instance of the Commissioner of Wealth-tax, Orissa for. the opinion of this Court on the following question of law:

(2.) The respondent assessee was assessed to wealth tax for the assessment years 1965-66, 1966-67 and 1967-68 .(the respective valuation dates being March 31, 1965, March 31, 1966 and March 31, 1967), in the status of a 'Hindu Undivided- Family'. In each of the assessments, the Wealth-tax Officer included a sum of Rs. 1,50,000/-. estimated as the accrued interest on the assessee's moneylending investments. The assessee appealed to the Appellate Assistant Commissioner-and urged that as it maintained its books of account in accordance with the cash system of accounting, the accrued interest on the money-lending investments could not be included in the wealth-tax assessments. The contention found favour with the Appellate Assistant Commissioner, and accordingly he deleted the additions of. Rs. 1,50,000/- representing accrued interest. In doing so, the Appellate Assistant Commissioner followed "Commr. of Wealth-tax, Bihar and Orissa v. Vysyaraju Badreenarayana Moorthy Raju (1971) 79 ITR 330.

(3.) The Wealth-tax Officer appealed to the Appellate Tribunal and contended that, accrued interest was liable to be included in the wealth-tax assessments of the assessee. The Wealth-tax Officer sought support from a judgment of the Andhra Pradesh High Court in Vadrevu Venkappa Rao v. Commr. of Wealth-tax, A. P. (1968) 69 ITR 552. The Appellate Tribunal observed that the judgment of the Orissa High Court was binding on it, and accordingly by a consolidated order dated April, 3, 1972, it dismissed the appeals. The Commissioner of Wealth-tax applied under sub-sec. (1) of S. 27 of the Wealth-tax Act for a reference of the cases to this Court in view of the conflict of opinion between the Orissa High Court and the Andhra Pradesh High Court, and so these references have been made.