The Commissioner of Wealth Tax vs T.V. Sundaram Iyengar and Sons Ltd.

P.P.S. Janarthana Raja, J.—The present appeals are filed u/s 27A of the Wealth Tax Act, 1957 by the Revenue, in W.T.A. Nos.

208/Mds/93, 209/Mds/93, 1215/Mds/93 & 354/Mds/94, passed by the Income Tax Appellate Tribunal, Madras, ''D'' Bench raising the following

substantial question of law.

Whether in the facts and circumstances of the case, the Tribunal was right in holding that the written down value of the cars and jeeps owned by

the assessed should be taken as the market value for the purposes of wealth tax?

The facts leading to the above question of law are as under:

i) The assessee respondent is a company in which public are not substantially interested. By virtue of the amendment in Wealth Tax Act, the

assessee respondent has become an assessable entity for wealth tax. By filing a Return, the assessee admitted only written down value of the cars

and jeeps, as the market value. The Assessing Officer held that the insured value of the vehicles as furnished by the assessee should be taken as the

current market value. Aggrieved by the order, the assessee filed an appeal to the Commissioner of Income Tax (Appeals). The Commissioner of

Income Tax (Appeals) directed the Assessing Officer to adopt the following method to arrive at the market value of the vehicles. For the vehicles

purchased before the last quarter but during the relevant previous year, 9% of the cost of acquisition should be taken as the market value. In

respect of the vehicles which are owned by the assessee for more than 1 year but less than 5 years, as on the relevant valuation date, 75% of the

cost of acquisition should be taken as the market value. Similarly, for vehicles which are owned by the assessee for more than 5 years, but less

than 15 years, 60% of the cost of acquisition should be to the fair market value. The vehicles which are owned by the assessee for more than 15

years but less than 25 years, 50% of the cost should be the market value and in respect of all the other vehicles, 40% of the cost should be taken

as the fair market value.

ii) Aggrieved by the order, the assessee filed an appeal to the Income Tax Appellate Tribunal. The Income Tax Appellate Tribunal followed the

earlier order and held that the book value should be taken as the fair market value for for the purpose of wealth tax. The learned counsel for the

Revenue submitted that the written down value of the vehicles should not be taken as the market value, for wealth tax purpose. Further it was

submitted that the C.I.T. (A) had reached a via media between the insured value and the written down value and had worked out a method of

calculation which ought not to have been disturbed.

We heard the arguments. In this case, what is shown in the books was offered for wealth tax assessments. The Assessing Officer had merely

adopted the insured value of the vehicles as the market value. The Assessing Officer ought to have determined the market value for each vehicle,

instead of merely adopting the value which was offered to the Insurance Company by the assessee. The Assessing Officer did not do anything

except adopting the value offered to the Insurance Company, as the market value. As to what should be the value of the asset is essentially a

question of fact, especially when the Tribunal had adopted the written down value as market value in the earlier assessment years in assessee''s

own case. No material is produced before us by the Revenue to show that the written down value does not represent the market value of the

vehicle.

In view of the foregoing conclusions, we find no error in the order of the Income Tax Appellate Tribunal and hence no substantial question of

law arises for consideration of this Court. Hence, the above tax cases are dismissed. No costs. Consequently, the connected TCMP Nos. 750 to

753 of 2005 are closed.