| Case ID |
de5cd66e-bc54-4535-986c-10eb200ab330 |
| Body |
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| Case Number |
Civil Appeals Nos. 539 of 1964, 66 and 67 of 1965 |
| Decision Date |
Nov 24, 1965 |
| Hearing Date |
|
| Decision |
The Supreme Court held that the Wealth Tax Officer was justified in accepting the value of the assets as shown by the appellant in its balance-sheet. It was determined that no one knows better the value of the assets than the assessee himself. The court concluded that the proposed dividends were not debts owed by the company on the valuation date, as nothing had happened beyond a mere recommendation by the directors. Furthermore, the court ruled that the provision for payment of income-tax and super-tax was a debt owed within the meaning of the Act, and therefore, was deductible in computing the net wealth of the assessee. |
| Summary |
This case revolves around the valuation of assets for wealth tax purposes, specifically in relation to the Wealth Tax Act, 1957. The Supreme Court of India addressed whether the Wealth Tax Officer was correct in accepting the value of the assets as presented by Kesoram Industries, which showed a significant revaluation of its assets. The court also examined the implications of proposed dividends and tax provisions on the overall net wealth of the company. It was concluded that the proposed dividends did not constitute a debt owed on the valuation date and emphasized the importance of accurate asset valuation in the context of wealth tax. This case underscores critical aspects of wealth tax assessments and the interpretation of tax liabilities, which are essential for tax professionals and corporate entities. Legal practitioners should pay close attention to this ruling, as it sets important precedents in tax liability assessments and asset valuation methodologies. |
| Court |
Supreme Court of India
|
| Entities Involved |
Kesoram Industries and Cotton Mills Ltd,
Commissioner of Wealth Tax (Central)
|
| Judges |
K. Subba Rao,
J.C. Shah,
S.M. Sikri
|
| Lawyers |
N.A. Palkhivala,
S.T. Desai,
R.K. Chaudhury,
S. Murthi,
B.P. Maheshwari,
A.V. Viswanatha Sastri,
N.D. Karkhanis,
R.N. Sachthey,
B.R.G.K. Achar,
R.H. Dhcbar
|
| Petitioners |
Kesoram Industries and Cotton Mills Ltd
|
| Respondents |
Commissioner of Wealth Tax (Central)
|
| Citations |
1989 SLD 976 = 1989 PTD 93
|
| Other Citations |
Commissioner of Wealth Tax v. Standard Mills Co. Ltd. (1963) 50 ITR 267,
Commissioner of Wealth Tax v. Travancore Rayons Ltd. (1964) 54 ITR 332,
Commissioner of Income-tax v. Western India Turf Club Ltd. (1927) LR 55 IA 14,
Wallace Bros. & Co. Ltd. v. Commissioner of Income-tax (1948) 16 ITR 240,
Chatturam Horilram Ltd. v. Commissioner of Income-tax (1955) 27 ITR 709,
Kalwa Devadattam v. Union of India (1963) 49 ITR (SC) 165
|
| Laws Involved |
Wealth Tax Act, 1957,
Income Tax Act, 1922,
Indian Companies Act, 1956
|
| Sections |
7(2),
2(m),
27,
3,
67B,
2(11),
55,
34,
16(1)(c),
4(1)(b)(ii),
211,
217
|