KAMAL CHAND KASLIWAL Vs. COMMISSIONER OF WEALTH TAX

JUDGEMENT

(1.) THIS reference has been made under r. 61-A of the Rules of the High Court of Judicature for Rajasthan, 1952 as the Judges constituting the Division Bench were equally divided in their opinion as to the interpretation of the provisions of S. 2(m) of the WT Act, 1957 ('the Act'). The question referred for the opinion reads as under:

(2.) THE answer to this question referred for opinion, depends upon the interpretation of S. 2(m)(iii) (a) and (b). For adjudicating the controversy it is necessary to look into the facts of the case and to consider the relevant provisions of the Act.

(3.) SEC . 3 of the Act is a charging section. It imposes a charge for tax in respect of the net wealth on the corresponding valuation date at the rate specified in the Schedule. The 'valuation date', according to S. 2(q) means the 'last day of the previous year' as defined in S. 3 if the assessment were to be made under that Act for that year. Sec. 4 of the Act provides for inclusion of certain assets in the net wealth of the individual though these assets were not held by him but are held by the spouse or the minor child, to whom they have been transferred by the individual. These assets under S. 4 are considered as the 'deemed assets' of the individual concern. Sec. 5 of the Act exempts certain assets from being included in his 'net wealth'. According to S. 2(m), 'net wealth' means the amount by which the aggregate value computed in accordance with the provisions of the Act of all the assets belonging to the assessee on the valuation date including the assets required to be included in the net wealth as on that day under the Act, is in excess of the aggregate value of all the 'debts owed' by the assessee other than the 'debt owed' by the assessee mentioned in sub-cls. (i), (ii) and (iii) of S. 2(m).