Commissioner of Wealth-tax vs R. Ramanathan Chettiar

R. Jayasimha Babu, J.—The Tribunal has merely followed the law laid down by this court in the case of S. Abdul Rahman Vs. Commissioner of Wealth-tax, . The Tribunal has remitted the matter to the Assessing Officer to determine the real rate of exchange of the Ceylon rupees into Indian rupees for the purpose of determining the extent to which deposits held in Ceylon in Ceylon rupees by the assessee, after conversion into Indian rupees should be included in the wealth-tax assessment of the assessee for the assessment year 1977-78.

This court in the case of S. Abdul Rahman Vs. Commissioner of Wealth-tax, has held that there is nothing in Section 7(1) of the Wealth-tax Act, 1957, dealing with the valuation of assets which indicates that only the remittable value of asset in a foreign country has to be included in the net wealth, and though, normally, the value of money in legal currency would be that value which is equivalent at the official rate of exchange, it would be open to an assessee to prove that the official exchange rate does not reflect the realistic exchange value, or that it was not fixed with reference to convertibility of the currency. The court held that it would be open to the assessee to prove that the official rate is not the realistic exchange rate and remitted the matter, to enable the assessee to adduce evidence. In the case before us, the Tribunal has remitted to the Wealth-tax Officer for a decision afresh after determining the real exchange rate if the assessee was to adduce any evidence on that aspect. There is no error in that order, the same being in conformity with the law laid down by this court.

Needless to say in case of the assessee''s failure to place acceptable evidence about the real exchange rate which is different from the official exchange rate, the rate to be adopted would be the official rate only.

The question referred to us regarding the correctness of the order made by the Tribunal is answered in favour of the assessee and against the Revenue.