High Court of Judicature at Allahabad
Case Law Search
Late Sri Gopal Krishtna Singhania v. C W T - WEALTH TAX REFERENCE No. 135 of 1989  RD-AH 1704 (14 December 2004)
Court No. 37.
W.T.R. No. 135 of 1989
Late Shri Gopal Krishna Singhania Vs.. C.W.T. Kanpur
Hon'ble R.K. Agrawal, J.
Hon'ble Prakash Krishna, J.
The Income Tax Appellate Tribunal, Allahabad has referred the following two questions of law under Section 27 (1) of the Wealth Tax Act, 1957, hereinafter referred to as to the Act for opinion to this Court.
R.A. No. 397(Alld) of 1988:-
"Whether on the facts and in circumstances of the case, the Appellate Tribunal was justified in law in upholding the view that the assessee was not entitled to the deduction of Rs. 18,29,516/- representing the notional amount of capital gains tax."
R.A. No. 398 (Alld) of 1988 :-
"Whether on the facts and in the circumstances of the case, the Appellate Tribunal was justified in law in upholding the view that the assesee was not entitled to the deduction of Rs. 28,50,289/- representing the notional amount of capital gains tax."
The reference relates to the assessment year 1979-80 and 1980-81. The applicant is an individual. He was holding certain shares. In the assessment proceedings for the assessment year 1979-80 and 1980-81 the value of the shares as on the relevant valuation date was Rs. 34,38,922/- and Rs. 46233443/- respectively. Before the Wealth Tax Officer the applicant had claimed a deduction of Rs. 1829514/- and Rs. 2850289/- respectively towards deduction of capital gains tax on the assumption that if the share are sold in the open market, the applicant would have required to pay the aforesaid amounts towards capital gains tax. The Wealth Tax Officer did not allow the claim of the applicant, which was upheld by the Commissioner of Wealth Tax (Appeals) and the Appellate Tribunal.
We have heard Sri A.N. Mahajan, learned Standing Counsel for the Revenue. Shri R.S. Agrawal has filed appearance on behalf of the applicant and we find that the controversy raised in the present reference is squarely covered by the decision of the Apex Court in the case of Bharat Hari Singhania Vs. Commissioner of Wealth Tax (1994) 207 I.T.R. 1, wherein the Apex Court has held that the amount of notional capital gains tax is not allowable deduction, while computing the net wealth of an assessee.
In view of the aforesaid discussion, we answer the question referred to us in the affirmative, i.e. in favour of the Revenue and against the assessee. There shall be no order as to costs.
Double Click on any word for its dictionary meaning or to get reference material on it.