Commissioner of Wealth Tax vs Smt. Kusum Bader

Shiv Kumar Sharma, J.—These applications u/s 27(3) of the Wealth Tax Act, 1957 (for short ''the Act'') have been submitted by the Commissioner of Wealth Tax for direction to the Income Tax Appellate Tribunal to refer certain questions of law said to arise out of the Tribunal''s order to this Court for its decision.

The prime question relate to the applicability of Rule 2B(2) of the Wealth Tax Rules, 1957 (for short ''WT Rules''). The Tribunal has declined to refer the question u/s 27(3) of the Act. Hence, these applications u/s 27(3) of the Act.

The Division Bench was of the view that since there were different decisions rendered by the Division Benches, they need to be examined by the Full Bench. The matters, therefore, were referred to the Full Bench.

We have heard the submissions advanced at the Bar.

In Juggi Lal Kamlapat Bankers and Another Vs. Wealth Tax Officer, Special Circle C-Ward, Kanpur and Others, , their Lordships of Supreme Court had occasion to consider Rule 2B(2) of WT Rules and it was indicated thus:- (Para 10)

".... Sub-rule (2) of the Rule 2-B clearly provides that where the market value of an asset exceeds its written down value or book-value by more than 20 per cent, the value of that asset for the purposes of Rule 2-A shall be taken to be its market value. In other words, it is clear that even where the Wealth Tax Officer has resorted to Section 7(2) for determining the value of assets of a business as a whole the written down values or book- values of specific assets as appearing in the balance sheet are not sacrosanct and when the market value exceeds the written down value or book-value by more than 20 per cent, the Wealth Tax Officer has to adopt the market value of such assets for the purposes of this Act. This is apart from the position that the resort to Section 7(2) itself is discretionary and optional, the provision being an enabling one."

On scanning the controversy, we notice that question of law involves in these matters relate to the interpretation of Rule 2B (2) of WT Rules and the controversy in question has already been settled by the Apex Court in Jaggi Lal Kamlapat Bankers v. Wealth Tax Officer (supra), and these matters can be decided by the Division Bench bearing in mind the ratio indicated in Jaggi Lal Kamlapat Bankers v. Wealth Tax Officer (supra).

We, therefore, remit the matter back to the Division Bench with the request to dispose of all these similar application in the light of ratio indicated in Jaggi Lal Kamlapat Bankers v. Wealth Tax Officer (supra). We request the Division Bench to decide the applications expeditiously because they are pending since 1988. The reference is answered accordingly.