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Commissioner of Wealth-tax Vs. Meattles (P.) Ltd. - Court Judgment

LegalCrystal Citation
Subject Direct Taxation
CourtDelhi High Court
Decided On
Case NumberW.T.R. No. 5 of 1975
Judge
Reported in[1985]156ITR569(Delhi)
ActsWealth-tax Act, 1957 - Sections 27(1)
AppellantCommissioner of Wealth-tax
RespondentMeattles (P.) Ltd.
Excerpt:
- - the tribunal expressed that it failed to see how the department could now claim to assess the same as its wealth for the same year......the circumstances of the case, the tribunal was justified in law in holding that the income of the crown flour mills would not be included in the net wealth of the assessed company for the assessment year 1958-59 ?' 2. the reference arises out of the assessment to wealth-tax of m/s. meattles pvt. ltd. of delhi for the assessment year 1958-59. the date of valuation of the assessed is march 31, 1958. for the assessment year 1957-58, in compliance with the direction of this court in w.t.c. no. 1-d/65, the income-tax appellate tribunal (for short called 'the tribunal') drew up a statement of the case and referred for the decision of this court the following question of law : 'whether, on the facts and in the circumstances of the case, the assets of the crown flour mills belonging to the.....
Judgment:

S.S. Chadha, J.

1. In this reference under section 27(1) of the Wealth-tax Act, 1957 (for short called 'the Act'), the following question of law has been referred for the opinion of the court :

'Whether, on the facts and in the circumstances of the case, the Tribunal was justified in law in holding that the income of the Crown Flour Mills would not be included in the net wealth of the assessed company for the assessment year 1958-59 ?'

2. The reference arises out of the assessment to wealth-tax of M/s. Meattles Pvt. Ltd. of Delhi for the assessment year 1958-59. The date of valuation of the assessed is March 31, 1958. For the assessment year 1957-58, in compliance with the direction of this court in W.T.C. No. 1-D/65, the Income-tax Appellate Tribunal (for short called 'the Tribunal') drew up a statement of the case and referred for the decision of this court the following question of law :

'Whether, on the facts and in the circumstances of the case, the assets of the Crown Flour Mills belonging to the assessed company and their value is liable to be included in the net wealth in the assessment of the assessed company for wealth-tax purpose ?'

3. This was registered as W.T.R. No. 4 of 1972 (CWT v. Meattles P. Ltd. [1985] 153 ITR 201 . In consideration of the facts and for the reasons recorded in our judgment of January 6, 1984 (which may be taken as part of this reference also), we answered the reference in favor of the Department and against the assessed. It was stated that in the case of immovable property of the value of Rs. 100 and above, its transfer can be effected only by means of an instrument in writing, duly stamped and registered. This principle has been consistently applied to a number of decisions in the context of the question of capital gains and balancing charge which arise on a transfer or sale. It was held that the assets of the Crown Flour Mills continued to belong to the assessed company in the absence of the transfer of the title by a valid sale deed and the proprietary rights did not get extinguished by mere acts attributed to the assessed.

4. We may also notice that an appeal was filed before the Tribunal in the income-tax assessment for the assessment year 1958-59 against the order of the Appellate Assistant Commissioner deleting the income of Crown Flour Mills from the assessed's hands. However, before the Tribunal, as its order shows, the Department withdrew that ground. In other words, in the income-tax assessment, that income remained excluded from the assessed's total income. If the income of Crown Flour Mills was adjusted against loss, then there would have been some profits available.

5. In the wealth-tax appeal before the Tribunal, the question arose whether that excess income after adjustment of loss could be treated as the assessed's wealth for this year. The rival contentions on the question of the transfer of the assets of the Crown Flour Mills were noticed but not decided. The matter was disposed of on the short ground that the Revenue has of its own agreed to the exclusion of the income of Crown Flour Mills from that of the assessed in the income-tax assessment. The Tribunal expressed that it failed to see how the Department could now claim to assess the same as its wealth for the same year.

6. While seeking the reference, the Department urged that the inadvertent admission made in the income-tax appeal for the exclusion of the income of Crown Flour Mills from the assessment should not have prevented the Tribunal from giving an independent finding in the wealth-tax appeal. The two enactments are pleaded to be separate and no rule of rest judicata applies. It is on these facts that the question has been posed. Decisions arrived at in one assessment year are binding neither on the assessed nor on the Revenue in respect of the subsequent assessment years. The principle of estoppel has no applicability to successive assessments. The Revenue authorities are not bound by any contention or admission or decision taken up in one assessment when the same issue come up for decision in a different assessment. The admission made is in the income-tax appeal for the exclusion of the income of Crown Flour Mills from assessment. This admission was withdrawn in the proceedings under the Act for determining the net wealth of the assessed for the assessment year 1958-59. There is no estoppel against a statute. Where the Revenue authorities take a particular view of the statutory provisions in the income-tax assessment and later on the realise that it was a mistaken view, then they cannot be estopped from taking a correct view of the statutory provisions later on. In view of our decision in W.T.R. No. 4 of 1972 (CWT v. Meattles P. Ltd. [1985] 153 ITR 201, that the assets of Crown Flour Mills continued to belong to the assessed company and their value is liable to be included in the net wealth in the assessment of the assessed company for wealth-tax purposes, the necessary consequence of this opinion is that the excess income of the assessed after adjustment of the loss had to be treated as the assessed's wealth for this year.

7. We answer the reference accordingly, i.e., in favor of the Department and against the assessed with no order as to costs.


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