THIRUMAGAL MILLS LTD. VS COMMISSIONER OF WEALTH TAX
2001 P T D 1928
[246 I T R 800]
[Madras High Court (India)]
Before M. S. Janarthanam and Mrs. A. Subbulakshmy, JJ
THIRUMAGAL MILLS LTD.
Versus
COMMISSIONER OF WEALTH TAX
Tax Cases Petitions Nos.439 and 440 of 1997, decided on /01/.
st
March, 1998. Wealth tax‑‑‑
‑‑‑‑Reference‑‑‑Company‑‑‑Assets‑‑‑Motor cars and trucks used for business purposes‑‑‑Tribunal correct in holding that motor cars were includible in "net wealth"‑‑‑No question of law arose ‑‑‑Finance Act, 1983, S.40(3)(vii)‑‑Indian Wealth Tax Act, 1957, S.27.
Where the motor cars and trucks were owned by the assessee company for the purpose of its business and they were not held as stock‑in -trade in the business carried on by it or used in the business of motor car hire married on by the assessee:
Held, that the Tribunal was correct in holding that levy of wealth tax on the vehicles was justified. No referable question of law arose from its order.
K.S. Sivaraman for Petitioner.
R. Sivaraman for C.V. Rajan for Respondent.
JUDGMENT
M.S. JANARTHANAM, J.‑‑‑These tax cases petitions, at the instance of the assessee‑‑‑Thirumagal Mills Ltd. Gudiyatham, North Arcot district 632 602, are for issuance of a direction to the Tribunal to state a case aid refer the common questions of law, as below, for the opinion of this Court:
"(1)Whether, on the facts and in the circumstances of the case, the Appellate Tribunal is justified in confirming the levy of wealth tax on all the vehicles, which are held as business assets of the company for the assessment years 1984‑85 and 1985‑86?
(2)Whether, on the facts and in the circumstances of the case, the Appellate Tribunal is justified in upholding the orders of the lower authorities and including the vehicles‑‑‑'trekker' in the term of motor car and thereby confirming the levy of wealth tax on the assessee‑company for the assessment years 1984‑85 and 1985‑86?
(3)Whether, on the facts and in the circumstances of .the case, the Appellate Tribunal is justified in concluding that all motor cars are to be brought within the purview of the Wealth Tax Act and without considering the intention of the legislation from the Finance Minister's Budget Speech at the time of reintroduction of the levy o1 wealth tax on closely‑held companies and especially in the absence of the term 'motor cars' in his speech?"
The Tribunal expressed the opinion that no question of law arise; for consideration from the common order of the Tribunal and, therefore, it declined to state a case and refer the questions of law, as set out above to this Court for opinion.
Under section 40(3)(vii) of the Finance Act, 1983, motor cars are includible in the net asset of the assessee. Only such of those motor cars; which are held by the assessee as stock‑in‑trade in a business carried on by it, are excludable from the net asset. Motor cars registered as trucks and used a; such in the business of running motor cars on hire by the assessee is also excludible from the net asset.
There is no pale of controversy that in the instant case, motor car: and trucks are owned by the assessee for the purpose of its business and they are not held as stock‑in‑trade in the business carried on by it or used as the basis in the business of motor car hire carried on by the assessee. It is on this basis, the Tribunal held that the questions of law, as set out above, are nor referable questions of law and application of relevant factual matrix to the relevant statutory provisions, namely, section 40(3)(vii) of the Finance Act, 1983. We are perfectly satisfied with the order of the Tribunal in projecting the rationale in rejecting the reference application.
These tax cases petitions are thus, disposed of. No costs.
M.B.A./519/FC Order accordingly