MURUGAPPAN M A Vs. COMMISSIONER OF WEALTH TAX

JUDGEMENT

(1.) THE assessee in this reference petition seeks a direction from this court to refer the following question for the opinion of this court

(2.) THE assessee in this case filed his wealth -tax return allowing a net wealth Rs. 10, 54, 342 and deducted therefrom wealth -tax liability of Rs. 10, 870. In arriving at the net wealth, the assessee had deducted debts to the extent of Rs. 1, 34, 814 which included a policy loan from the Life Insurance Corporation and accrued interest thereon of Rs. 18, 600. Along with the wealth -tax return, the assessee also appended a note claiming relief tinder rule 3 of Part II of the Schedule to W.T. Act, as he is not citizen of India and is not ordinarily resident in India. The WTO allowed the deduction of the loan from the Life Insurance Corporation treating it as a debt and also gave 50 per cent. reduction of tax, treating the assessee as a resident, but not ordinarily resident. After the assessment, the internal audit party pointed out (1) that the loan from the Life Insurance Corporation was not deductible under s. 2(m)(ii), and (2) that the income -tax refund of Rs. 9, 202 should be included in the net wealth. It also pointed out that the assessee was a resident, but not ordinarily resident, and he was not entitled to 50 per cent. reduction of the tax, as if he was a non -resident, following the procedure adopted for the year 1974 -75, during which the assessee was in fact a non -resident. Taking note of the said audit report, the WTO reopened the assessment.

(3.) THE factual position has been pointed out by the audit report, and the report should be taken to constitute information within the meaning of s. 17(1)(b)The learned counsel for the assessee would contend that whether the assessee is a resident, but not ordinarily resident or is a non -resident, is a question of law, the audit party cannot instruct the WTO as to how the assessee should be treated, and that relates to a question of law. We do not see any substance in the contention urged by the learned counsel. The audit party merely brings to the notice of the WTO, the note given by the assessee along with his wealth -tax return wherein he had claimed to be a resident, but not ordinarily resident, and that in the face of that note, the assessee cannot be treated as a non -resident. We do not see how the said question involves a question of law. In respect of other matters also, the audit party merely brings to the notice of the WTO certain omissions and commissions made by him, and the audit party cannot be said to have instructed the WTO on matters of law. In this view, we are in entire agreement with the Income -tax Tribunal when it says that the audit report would constitute information, so as to attract s. 17(1)(b) of the W.T. Act. The petition is dismissed.