LexCOMMISSIONER OF WEALTH TAX, PATNA versus RAGHUBIR NARAIN SINGH
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;:" ' . ••• :-> . ' .. ' f ~ . COMMISSIONER OF WEALTH TAX, PATNA ' v. RAGHUBIR NARAIN SINGH i \ Pebruary 20, 1984 625 _.,.....~. - [ V.D .• TULZAPURKAR AND SABYASACHI MUKHARi1, JJ. J "'Net wealth"-~·-"V,aluation of'·'n~; wealth.": unde~ section 7 _re'ad with ser_tiqn 2(m) Of the Wealth Tax A.ct,...J.951-Treatnu!llf of (a) co1npensation an10u11t'receiv'ah!e under. the Bihar Lands. Refor1~~-Act'; (b) the ~eh~ i~ ihe nati1re of Agriculture Inconie Tax due to Government, and,.ded_uctible ffo1n the receivable con1pensatio11; (c) the a1nou1lt of money -decree's- fully attached ·'by Garnishee orders of competent court and (d) claims tt~der aecrees not yet e.xeruted, expl~dned. "y The ~sses~ee is an individual and hi~ estate· stood ~csted· in the State of-Bikar U_nder the Bihar Land Reforms ·Act, 1950'as and lrom 1st or' July.1952, a~d he -is .~--._, I entitled to receiVC cOmPens'atio~ under the Acf rron1 ,the Govern 1 ment .. 'The; assessr,e . ""-.,during the relevant a~sessment year5 had obtained twdiim<?netary . decrees' from his debtors, but the amolinfa receivable by the-'"assessee were attached by two~7 gatnish"e.e ... orders iss'uCd by·the Cak!u"tta High Court on \3th January-1960 and· 21st J~n:e ," 1961. The asseisee also 0had some claim. decrees but as th_eY were -not yet exeCuted: they were sho\Vll in -:'his book of accounts as Still Outstanding. The assesseci had to pay. Agricultural Incofile Tax to the Government and thi$ deb? has.to-be deducted _from· ·,• ·"'' . the conipenSation receivable by th·~ assessc~: Jn these ·five appeais oY certificrite of fitneSs, question arose as to whether thC answers of the Hjgh <;:::ourt of. ~atna Given · .. in the Tax reference!': on the questi9n of correctness of valuation of the "net wealth" u·nder soction 7 Or the weilth Tax Act, :1957 are correct. ·• . ' The Revenue Urged ~be followirl& five propositions:1 - ·' (I) For t?c· ~urposes_ Qf compUtation of nei·wealth of an_ a".!s~soc: each assCt ,belonging to ;~irn-and (lach de'bt owed by.him haS to -be valutd separatcIY. " (2)· The differencetbetwCell the ~ggre.!iat~ value of the assets and the awe~ gate value of the.-debts represC~ts his ~ct·wealth. ( A B c •. D ' , F H •,,.; . ,, J \ A B c D E F G . ~. H I 626 '· SUPREME COURT REPORTS [1984] 2 s.C.R. (3) · I? ~!ermining th~ mar~~t v~lue,.of an. ass~t (or_ the resi9ue of the aSset .?1~n1sh~d by a~ over-nd1ng title on the asset itself),' any liability or debt 1ncurre_d in relation to it has _to ~e ignored as the debt or· liability hits to be separately evaluated: · (4) What i~· the ~~rke.t value of a ce1iain ·asset or the resid~e asset ~s referred to above, iS·a que~tion of fact, to be· detcrnlined finally by the Inco1ne-tax Appellate Tri_bunal t.;iking into acCollnt ~he relevant evidence a1-i~cl consld~ ratio~s put. forward by both the sides and the High Court Cannot inter- fere with such a finding of fact unlt:ss it· is found to be based on irrelevant consideration or is arrived at by ignorir:g"relevr.nt eVidcnce. ~· • • (5) ./ When the debt is represented as an asset, its ma1:ket value has to be deter- miii.Cd )n the san1e ·Iha.oner as ttie ·market value of any other ass"et irres- Pec:tive of the fac.t whether such an asset-de~t is encu~bercd J;:iy another debt-0wed fro111 the asses~, .becallse __ the later-tmlntioned debt can qualify fo~ deduction· at its· rriarket V<i.lue indcI?~ndcntly. · Dismissing_ the appeals.the Coµrt, . -\· , • HP,LD:· 1.l. Sect_ion 7 and 2(M) of the Wealth Tax Act, 1957, though ~ust be rea4 harmoniously, apply at two· different stiges.' Section 7 · deals with the- esti- mation of the market value of the asset, while section 2(M) enjoins that froii1 the same, the .debt owned by the assessee to be dedi1cted. The debts may. be deducted ., from the value of assets bUt the valu~tion ~Of all asse~ hfls to be done in lerms of~ Section 7(1) taking into considerationS all· the hazards incluctmg tbe possibility of . an an1ount orl account of debt being deduct.ed fron1 t~1e .value of the asset is· a factor. · \Vhicb:_,vill _influence a ;>respective buYer in the ope1t market, ·depending upon-the facts and drucumstances of each q:ise. [633-EF] • 'f J 1.2. ,.:Agricultural income tax dties from the assessee· which are deductible fro1n the compensation under Section 4(c) of the 'Bihar Land Refonns Act, .1950, if the "s3.me bas not been dectuCted befo
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