BISHANLAL AHUJA Vs. COMMISSIONER OF WEALTH TAX

JUDGEMENT

(1.) These two reference cases arise under the Wealth-tax Act, 1957 (for short, "the Act"). They relate to the same assessee. Referred Case No. 49 of 1987 is in respect of the assessment years 1972-73 to 1977-78, whereas Referred Case No. 50 of 1987 pertains to the assessment years 1978-79 and 1979-80. At the instance of the assessee, the following question is referred to us for our opinion, under section 27(1) of the Act, in these cases :

(2.) The facts giving rise to these reference cases may briefly be referred to here. The assessee is a partner in the firm, viz., 3 Aces, Abids Road, Hyderabad. The said firm had originally two partners, the petitioner and his brother, one Shri Jagatram Ahuja. The assessee purchased the share and interest of his brother with effect from 1/04/1971, and thus became the absolute owner of the said property. On 4/01/1972, he converted the said property into a partnership property by constituting a partnership firm of himself and his four daughters. That property is known as "Mohsin-Ul-Mulk Kothi". It comprises a main building having door No. 4-1-969/7 together with the appurtenant land admeasuring 9,877 sq. yards (hereinafter referred to as "the building in question"). For the said assessment years, the net wealth of the assessee was determined treating the entire building in question as the assessee's property under rule 2 of the Wealth-tax Rules, 1957 (for short, "the Rules"). The assessee appealed to the Commissioner of Income-tax against the order of the Wealth-tax Officer. The appeal was dismissed on the ground that in view of clause 14 of the partnership deed, the assessee was entitled to take over the entire partnership assets including the building in question, so it would have to be considered as the property of the assessee. the assessee then filed the second appeal before the Appellate Tribunal. The Tribunal dismissed the appeal upholding the order of the appellate authority (Commissioner of Income-tax). Thus, the abovesaid question came to be referred to this court.

(3.) Shri Y. Ratnakar, learned counsel for the assessee, submits that the Tribunal erred in confirming the orders of the Wealth-tax Officer and the Commissioner of Income-tax (Appeals) by erroneously interpreting rule 2 of the Rules and, therefore, the question has to be answered against the Revenue. He further submits that the Tribunal did not record a finding on relevant questions of fact and, therefore, the Tribunal has to be directed to record a finding on all the relevant aspects of the case. On the other hand, learned standing counsel for the Revenue submits that rule 2 of the Rules has been properly invoked by the authority and the net wealth was correctly determined and, therefore, the order of the Tribunal cannot be found fault with.