SAHU DHARMATA SARAN Vs. COMMISSIONER OF WEALTH TAX

JUDGEMENT

(1.) THIS is a reference made by the Appellate Tribunal at the instance of the assessee under Section 27(1) of the Wealth-tax Act on the following question :

(2.) THE material facts are these : THE assessee is a Hindu undivided family carrying on money-lending and other businesses. For the relevant assessment year 1959-60, the assessee closed its accounts on Asharh Sudi 9, Samvat 2015, which is the valuation date. THE Wealth-tax Officer made an assessment of the net wealth of the assessee as on the aforesaid valuation date estimating the value thereof at Rs. 5,33,067. THE Wealth-tax Officer adopted the value of the total assets of the business as disclosed in the balance-sheet, as on the aforesaid valuation date, at Rs. 6,70,617. THE Wealth-tax Officer allowed certain deductions and computed the value of the movable assets at Rs. 4,70,574. THE amount included a sum of Rs. 2,94,556 which represented the amount invested by the assessee family in its money-lending business. THE Wealth-tax Officer, it appears, estimated the value of the investments at par and included the whole amount in the value of the movable assets computed by him at Rs. 4,70,574. THE assessee preferred an appeal to the Appellate Assistant Commissioner of Wealth-tax in which several grounds were taken. One of the grounds was that the Wealth-tax Officer was not justified in determining the value of the investments in business at the figure mentioned in the balance-sheet. THE Appellate Assistant Commissioner, however, rejected this ground and dismissed the appeal.

(3.) AT the instance of the assessee the Tribunal has referred the question quoted above for the opinion of this court. In the first place, the question as drafted by the Tribunal is erroneous, because, as would appear from the appellate order of the Tribunal, the only dispute related to the valuation of the investment in the money-lending business. The Wealth-tax Officer had adopted the value of the investments at the figure shown in the balance-sheet of the assessee, namely, Rs. 2,94,556, while the contention of the assessee, was that necessary adjustment should be made to the value in view of the fact that investments in money-lending business were hardly sold in the open market at par. It was urged on behalf of the assessee that investments in money-lending business were generally sold at fifty per cent. of the book value and therefore, the Wealth-tax Officer was not correct in taking the value of the investments at the figure shown in the balance-sheet of the business. The question postulated by the Tribunal should, therefore, have been related to the value of the investments in the business, assessed at Rs. 2,94,556, and not to the value of all the movable assets of the business, assessed at Rs. 4,70,574. Moreover, the question as framed by the Tribunal appears on the face of it to be a question of fact, because any question as to what is the correct value of an asset can hardly be regarded as a question of law.