R RATNAM Vs. WEALTH-TAX OFFICER

JUDGEMENT

(1.) This appeal arises out of the wealth-tax assessment of Shri R. Ratnam, the appellant herein, who is assessed in the status of a "Smaller HUF". The assessment year is 1984-85 for which the valuation date was 31-3-1984.

(2.) We have heard Shri S. A. Balasubramaniam, the learned counsel for the appellant, and Shri G. Natarajan, the learned Departmental Representative, and carefully considered their submissions in the light of the authorities relied on by them.

(3.) The first objection is to the inclusion of the Compulsory Deposit made by the appellant amounting to Rs. 1,17,840 in his net wealth for this year. The WTO included the said amount of Compulsory Deposit as he was of the view that such amount was not exempt from wealth-tax. On appeal, the CWT (A) relied on the Compulsory Deposit Act which had been retrospectively amended with the introduction of section 7A with effect from 1-4-1975. He pointed out that as per the amended provision, the amount of Compulsory Deposit should be deemed to be a deposit with a banking company. The CWT (A), therefore, directed the WTO to allow exemption on the Compulsory Deposit subject to the ceiling limit under section 5(1A) of the Wealth-tax Act.