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1971 Supreme(SC) 443
SUPREME COURT OF INDIA
COMMISSIONER OF WEALTH Tax west BENGAL
Versus
ALUMINIUM CORPORATION Limited
Decided on, August 30, 1971
B.P.MAHESHVARI, B.SEN, D.SHARMA, N.R.Khaitan, O.P.KHAITAN, R.N.SACH, S.C.Manchanda, S.P.NAIR
Headnote:
Wealth Tax Act – Section 7 – Assessment – Civil are by certificate and Civil is by special leave. – These appeals are brought by the Commissioner of Wealth Tax, West Bengal. – In all these appeals court is dealing with the case of the same assessee, namely Aluminium Corporation Ltd. – Relevant assessment years are 1957-58, 1958-1959 and 1959-1960 and the material valuation – So far as the assessment of the assessee for the assessment year 1957-58 is concerned the matter had come up to this court on an earlier occasion. – Court remanded the case to the High court to decide the case afresh, if necessary after reforming the first question in the light of the principles enunciated by this court in the order of remand-see Commissioner of Wealth Tax, West Bengal v. Aluminum Corporation Ltd. – High court after expressing doubts about the competence of this court to remand the case brought to this court under the provisions of the Wealth Tax Act has answered the first question in favour of the Revenue. – So far as the second question is concerned it has answered the same in favour of the assessee. – As against that order the Department has brought Civil – Other two appeals relate to the assessment of the assessee for the assessment years 1958-1959 and 1959-60. – Here, the High court has answered the first question referred to it in favour of the assessee and did not answer the second question. – Held, It is open to the assessee to satisfy the authorities under the Wealth Tax Act that the valuation shown in the balance-sheet is not correct – But in the absence of such a proof, the Wealth Tax Officer will be justified in proceeding on the basis that the value shown in the balance-sheet is correct because no one can know the value of the assets of a business more than those" who are in charge of the business. – Value of the assets shown in the balance-sheet can justifiably be made the primary basis of valuation for the purpose of the Wealth Tax Act. – In other words it can be taken as prima facie evidence of the value of the assets. – Here again the High court ignoring the ratio of the decision of this Court in Keshoram Indushies cast as well as the other decisions of this Court held that the evidence afforded by the balance-sheet cannot be considered as primary evidence or prima facie evidence of the value of the assets of the business. – To say the least, the learned chief justice indulged in an unnecessary mental exercise forgetting the fact that the law as interpreted by this Court is binding on all courts and tribunals. – When the value of those assets had to be determined off the valuation dates concerned in these cases, the Wealth Tax Officer should have deducted from the 1956 valuation the value of thedepreciation of those assets after the date they were revalued. – Undoubtedly those assets were subject to wear and tear and there was no evidence to show that the market value of those assets had gone up after they were revalued in 1956. – Court is of the opinion that the finding of the tribunal on that question was essentially a finding of fact. – That finding was based on relevant evidence. – It is not vitiated in any manner. In our opinion, the tribunal took a correct view of the scope of S. 7 (2) of the Wealth Tax Act and its approach to the question was in accordance with law. – Appeals Allowed
Judgment-
Hegde,
( 1 ) CIVIL Nos. 1691 1692 of 1968 are by certificate and Civil No. 1075 of 1971 is by special leave. These appeals are brought by the Commissioner of Wealth Tax, West Bengal. In all these appeals we are dealing with the case of the same assessee, namely Aluminium Corporation Ltd. The relevant assessment years are 1957-58, 1958-1959 and 1959-1960 and the material valuation dates are 31/03/1957, March 31/03/1958 and Ma 31/03/1959. So far as the assessment of the assessee for the assessment year 1957-58 is concerned the matter had come up to this court on an earlier occasion. This court remanded the case to the High court to decide the case afresh, if necessary after reforming the first question in the light of the principles enunciated by this court in the order of remand-see Commissioner of Wealth Tax, West Bengal v. Aluminum Corporation Ltd. The High court after expressing doubts about the competence of this court to remand the case brought to this court under the provisions of the Wealth Tax Act has answered the first question in favour of the Revenue. So far as the second question is concerned it has answered the same in favour of the assessee. As against that order the Department has brought Civil No. 1075 of 1971. The other two appeals relate to the assessment of the assessee for the assessment years 1958-1959 and 1959-60. Here, the High court has answered the first question referred to it in favour of the assessee and did not answer the second question.
( 2 ) THE material facts in all those three appeals are more or less similar and for deciding the questions of law arising for decision, it is sufficient if we set out the facts as set out in the Statement of the case submitted by that tribunal to the High court along with the questions of law arising for decision in respect of the assessment of the assessee for the assessment years 1958-1959 and 1959-60. From that Statement we get the following facts:
( 3 ) THE assessee companys fixed assets namely, land, buildings, plant and machinery were valued at Rs. 2,19,982. 00, Rs. 36,13,906. 00 and Rs. 93,78,868. 00 respectively as on 31/03/1955. This valuation did not take into account depreciation for the year ending 31/03/1956, in respect of buildings, plant and machinery. A year later, i. e. , on 31/03/1956, the same assets were valued at Rs. 4,99,340. 00, Rs. 1,08,40,840. 00 and Rs. 1,89,23,449. 00. This valuation was also without taking into account depreciation for the year ending 31/03/1956, in respect of building, plant and machinery. The increase in the value of these assets, after making allowance for all additions made to the assets, was due to the revaluation ofthe assets made by the company before 31/03/1956. The increase in value on account of revaluation was to the tune of Rs. 2,83,871. 00, Rs. 72,31,204. 00 and Rs. 98,67,481. 00 in the case of land, buildings and machinery respectively. The Directors of the company in their annual report for the year ended 31/03/1956, noted that these assets had been revalued so as to indicate a true picture of their value and that evaluators had given due consideration to depreciation which the buildings, plant and machinery had been already subjected to. A corresponding capital reserve of an amount of Rs. 1,73,82,55. 00 was created against the increase in the value of the assets. The increase in the value of assets effected before 31/03/1956, was carried over to 31/03/1958 and Ma 31/03/1959, the relevant valuation dates and the capital reserve aforesaid continued to remain unaltered.
( 4 ) THE company in submitting its return of wealth-tax as at the relevant valuation dates claimed before the Wealth Tax Officer that its lands, buildings and machinery should be valued according to the written down value at per income-tax records after allowing depreciation according to the Income Tax Act. According to the company the value of these assets should be respectively Rs. 2,26,786. 00. Rs. 12,38,109. 00 and Rs. 11,46,979.
