Commissioner of Income Tax vs Moti Chand

This is a reference u/s 27(1) of the Wealth-tax Act, 1957, at the instance of the Commissioner of Wealth-tax for deciding the following question of law, namely :

"Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the value of paintings, etc., was not included in the wealth of the assessee ?"

The relevant assessment years are 1975-76, 1976-77 and 1978-79. The question for decision is whether the value of paintings, drawings and manuscripts could be added in the net wealth of the assessee or they were exempted u/s 5(1)(xii) of the Wealth-tax Act, 1957. The Wealth-tax Officer rejected the assessee''s contention that they were exempted. However, the Appellate Assistant Commissioner reversed the view of the Wealth-tax Officer and the Tribunal has affirmed the Appellate Assistant Commissioner''s view. Hence, this reference at the instance of the Commissioner.

The same question relating to the same assessee in respect of some other years of assessment was decided in favour of the assessee in Commissioner of Wealth-tax Vs. Moti Chand Khajanchi (Decd. by legal representatives Smt. Kamala Devi and Others), It was held therein that the assessee did not hold the paintings, etc., for purposes of sale and that, therefore, the value of the paintings, etc., could not be included in the net wealth of the assessee. Accordingly, their value was exempted from wealth-tax u/s 5(1)(xii) of the Wealth-tax Act, 1957. The same view has to be taken in these assessment years also.

Consequently, the reference is answered against the Revenue and in favour of the assessee by holding that the Tribunal''s view is justified.