Court : Kerala
Reported in : (2003)185CTR(Ker)111; [2004]265ITR312(Ker)
..... menon, learned senior central government standing counsel appearing for the appellant submitted that section 40(1) of the finance act, 1983 clearly provided for assessment of closely-held companies to wealth-tax and that the exemption provided under clause (vi) of sub-section (3) of section 40 of the said act did not provide for exclusion of a building used for housing a hospital other than a hospital run mainly for the welfare of its employees and, therefore, ..... if we consider the matter with reference to the external aid such as speech made by the finance minister regarding the scope of section 40 of the finance act, 1983, the amendment to section 40(3), clauses (i), (v) and (vi) and the memorandum explaining the amendment, the position will ..... the purpose of introducing section 40 of the finance act, 1983, was explained by the finance minister in his budget speech for 1983-84-part b (1983) 140 itr 32 as follows :'it has come to my notice that some persons have been trying to avoid personal wealth-tax liability by forming closely-held companies to which they transfer many items of their wealth, ..... by the finance act, 1992, section 13 of the finance act, 1960 and section 40 of the finance act, 1983, have ..... for the respondent-assessee submits that 'companies' as an entity were exempted from assessment under the act from the 1st day of april, 1960, by the finance act, 1960, and that it is only by the finance act, 1983, closely-held companies are brought within the purview of the act. .....
Tag this Judgment!Court : Chennai
Reported in : (2003)180CTR(Mad)178
..... of facts, two different tribunals have arrived at a diametrically opposite view, one holding that the property let out by the assessee was not exigible to wealth tax under section 40(3)(vi) of the finance act 1983, but on the same set of facts the appellate tribunal for an earlier assessment year though rendered subsequently, took a different view holding that the same property was liable to be taxed under the provisions of ..... that the motor cars, owned as stock in trade of the dealer are liable to be taxed as the words used in section 40(3) of the finance act 1983, do not preclude the exclusion of stock in trade from the list of assets to be valued for the purpose of wealth tax. ..... ' has taken the view that unless a business asset is excluded from the scope of section 40(3)(vi) of the finance act 1983, the asset though a business asset would be liable to be taxed as the list is exhaustive and when the list does not exclude a particular asset, the asset would be liable ..... by the assessee would fall within the clause found in section 40(3)(vi) of the finance act 1983 and therefore, the question whether it is a plant or not is not of ..... the finance minister while introducing the finance bill 1983 has given the reason for introduction of section 40 of the finance act 1983 and the speech of the finance minister reads as under:-'it has come to my notice that some persons have been trying to avoid personal wealth tax liability by forming closely held companies to which they transfer many .....
Tag this Judgment!Court : Chennai
Reported in : 2007(1)CTC13; (2006)205CTR(Mad)225; [2006]286ITR297(Mad); (2006)4MLJ836
..... is now necessary to refer to the provision of section 40 of the finance act, 1983 and the same reads as follows: revival of levy of wealth-tax in the case of closely-held companies -(1) notwithstanding anything contained in section 13 of the finance act, 1960 (13 of 1960), relating to exemption of companies from levy of wealth-tax under the wealth-tax act, 1957 (27 of 1957) (hereinafter referred to as the wealth-tax act), wealth-tax shall be charged under the wealth-tax act for every assessment year commencing on and from ..... the court rejected the contention and held that section 40 of the finance act, 1983 covers not only unproductive assets like gold, silver, platinum, stones, ornaments, utensils but also other properties like land and the building appurtenant thereto ..... counsel appearing for the revenue submitted that section 40 of the finance act, 1983 clearly provided for assessment of closely-held companies to wealth-tax. ..... we are of the view that since the case of the assessee does not fall within the exclusionary clause mentioned in section 40(3)(vi) of the finance act, 1983, the assessee is liable to be taxed on the value of the tenanted portion of the building under section 40 of the finance act, 1983. 14. ..... of the view that since the case of the assessee does not fall within the exclusionary clause mentioned in section 40(3)(vi) of the finance act, 1983, the assessee is liable to be taxed on the value of the commercial complex under section 40(3) of the finance act, 1983.12. .....
Tag this Judgment!Court : Chennai
Reported in : (2003)181CTR(Mad)534; [2003]260ITR617(Mad)
..... of the same, the tribunal stated a case and referred the following question of law :'whether, on the facts and in the circumstances of the case, the tribunal was right in law in overlooking sub-section (7) of section 40 of the finance act, 1983, and holding that the said section relating to levy of wealth-tax in the case of closely held companies does not apply to the assessee-club, which has been declared on its own request as a company under ..... though the submission of learned senior standing counsel for the revenue is attractive, however, considering the object behind section 40 of the finance act, 1983, and the purpose for which section 40 was introduced reintroducing levy of wealth-tax in a limited way and in a limited manner and taking note of the marginal heading of section 40 of the finance act and subsequent amendments made in 1992, the intention behind the section and the language employed in the section, we are of the ..... have the meaning assigned in section 2(18) of the income-tax act, 1961, a reading of section 2(18) of the income-tax act shows that the said sub-section applies to a company, but the definition, 'company' found either in section 2(17) of the income-tax act or in section 2(h) of the wealth-tax act, which is pari materia to section 2(17) of the income-tax act, by which the assessee is treated as a company, is not incorporated in section 40 of the finance act, 1983, nor is it a part of the definition of the company in section 2(18) of the .....
Tag this Judgment!Court : Mumbai
Reported in : 1994(2)BomCR164; [1994]208ITR623(Bom)
..... petition filed under article 226 of the constitution of india, the petitioners are seeking a declaration that the amendment made to section 37 of the income-tax act, 1961, by section 17(b) of the finance act, 1983, by inserting sub-sections (3a) to (3d) is bad in law, illegal, invalid and violative of the petitioners' fundamental rights. ..... judgment, the challenge to the provisions of sub-sections (3a) to (3d) of the section 37 of the income-tax act as introduced by section 17(b) of the finance act, 1983, is without any merit and the petition must fail. 20. ..... the petitioners, therefore, challenged the amendment made to section 37 by section 17(b) of the finance act, 1983, claiming that the amended sections are violative of the fundamental rights guaranteed under articles 14 and 19 of the constitution ..... parliament by the finance act, 1983, again amended section 37 by inserting sub-sections (3a) to (3d) and, inter alia, provided that 20 ..... the reliance by shri chinoy on the speech of the finance minister at the time of introduction of the finance act cannot lead to the conclusion that the fiscal levy seeks to curtail the volume of advertising on the ground that such expenditure is wasteful ..... , it is interesting to note that earlier by the finance act, 1978, sub-sections (3a) to (3d) were inserted in section 37 of the act and those sub-sections were omitted by the finance act, 1980. ..... the year 1978, section 37 of the act was amended by the finance act, 1978, by inserting sub-sections (3a) .....
Tag this Judgment!Court : Madhya Pradesh
Reported in : (1994)121CTR(MP)116; [1996]221ITR459(MP)
..... by section 40 of the finance act, 1983, it was, however, provided that notwithstanding anything contained in section 13 of the finance act, 1960, wealth-tax shall be charged under the wealth-tax act for every assessment year commencing on or from the first day of april, 1984, in respect of the net wealth on the corresponding valuation date of every company, not being a company in which the public are substantially interested, at ..... the petitioners have in this petition challenged the constitutional validity of section 40 of the finance act, 1983, on the ground that it violates article 14 of the constitution of india. ..... we do not find any discrimination or arbitrariness, as complained of by the petitioners and section 40 of the finance act, 1983 cannot be attacked on that count.16. ..... the provisions of section 40 of the finance act, 1983, are thus arbitrary and offend article 14 of the constitution of india on the ground of lack of rational classification. ..... thus, by virtue of section 40 of the finance act, 1983, wealth-tax was leviable on the net wealth of the company which is a 'closely-held company'.6. ..... under section 40 of the finance act, 1983, wealth-tax is levied at the rate of two per cent. ..... thus, a private company as defined in the companies act, 1956 (1 of 1956), shall not be a company in which the public are substantially interested and, therefore, will be a company from whom wealth-tax can be charged by virtue of section 40 of the finance act, 1983.10. .....
Tag this Judgment!Court : Chennai
Reported in : (2004)188CTR(Mad)283; [2004]269ITR203(Mad)
..... submitted by the assessee that, that factory should be excluded from the assessable wealth as the memorandum of association of the company mentions the leasing of the property of the company as one of its objects clause (vi) of section 40(3) of the finance act stipulates that what is to be excluded is a factory which is used by the assessee for the purpose of its business here it cannot be said that the factory was being used by the assessee for the purposes of its business ..... the main question for consideration is whether the godowns let out to food corporation of india would be excluded under the provisions contained in section 40(3)(vi) of the finance act, 1983.4. ..... appeal filed on behalf of the department, the tribunal confirmed the order of the appellate authority by holding that warehouses were the business assets of the assessee and were exempted under the provisions of section 40(3)(vi) of the finance act, 1983. ..... was right in law in holding that the assessee engaged in construction and leasing of warehouses was not liable to wealth-tax in respect of the value of the warehouses as they were exempt under the provisions of section 40(3) of the finance act, 1983?2. ..... -company as godown or warehouse for the purpose of its business it is submitted that unless the building is used by the assessee as godown or warehouse for the purpose of its business, it cannot be excluded under the provisions of section 40(3) of the finance act, 19837. .....
Tag this Judgment!Court : Supreme Court of India
Reported in : AIR2006SC428; (2005)199CTR(SC)320; [2005]279ITR310(SC); JT2005(5)SC639; (2005)12SCC717
..... to overcome this decision, section 9 (1)(ii) was amended by the finance act, 1983 with effect from 1.4.1979 to include an explanation to section 9(1)(ii) which read as follows:-'explanation-for the removal of doubts, it is hereby declared that income of the nature referred to in this clause payable for service rendered in india shall be ..... the finance act 1999 which followed the bill incorporated the substituted explanation to section (9)(1)(ii) without any change.the explanation as introduced in 1983 was construed by the kerala high court in commissioner of income tax v. s.r. ..... it was further submitted that the amendment to the explanation to section 9(1)(ii) was brought about by the finance act 1999 and was retrospective since it was clarificatory. ..... 779 dated 14th september, 1999 containing explanatory notes on the provisions of the finance act, 1999 in so far as it related to direct taxes. ..... goslino mario : [2000]241itr312(sc) these decisions are thus authorities for the proposition that the 1983 explanation expressly introduced with effect from a particular date would not effect earlier assessment years.13. ..... in this state of the law, on 27th february, 1999 the finance bill, 1999 substituted the explanation to section 9(1)(ii) (or what has been referred to by us as the 1999 explanation). ..... therefore the salary paid for the field breaks in the uk was not for 'service rendered in india' within the meaning of 1983 explanation to section 9(1)(ii) of the act.10. .....
Tag this Judgment!Court : Kerala
Reported in : (1994)116CTR(Ker)15; [1994]207ITR598(Ker)
..... bear in mind section 37(2a) and also the newly inserted explanation 2 to section 37(2a) by the finance act of 1983 with retrospective effect from april 1, 1976 (by way of amendment). ..... of a very general nature and without reference to the relevant provisions of the statute, and in particular, explanation 2 to section 37(2a), which was introduced by the finance act, 1983, with retrospective effect from april 1, 1976. ..... the notes on clauses of the finance act, 1983, explains the object of the amendment to the following effect (see [1983] 140 itr 124):'sub-clause (a)(ii) seeks to add a new explanation to clarify that 'entertainment expenditure' includes expenditure on hospitality of every kind whether provided under any express or ..... the scope and effect of section 37(2), 37(2a) along with explanation 2, though the amendment to the finance act, 1983, which had retrospective effect from april 1, 1976, had come into force when the appellate tribunal decided the appeals on september 2, 1983. ..... providing lodging facilities to them is an entertainment expenditure :'...we are clearly of opinion that in interpreting the expression 'entertainment expenditure' occurring in sub-sections (2a) and (2b) of section 37 of the act, the word 'entertainment' should be taken to mean hospitality of any kind extended by the assessee directly in connection with his business or profession.'15. ..... 1983] 3 itd 566 and allowed the assessee's claim as one falling under sub-clause (ii) of section 35b(1)(b) of the act .....
Tag this Judgment!Court : Chennai
Reported in : (2003)180CTR(Mad)174; [2003]262ITR129(Mad)
..... on the facts and in the circumstances of the case the tribunal was right in law in holding that the property let out by the assessee was not an asset exigible to wealth tax within the meaning of section 40(3)(vi) of finance act, 1983?2.the short facts are that the assessee is a closely held company in which the public are not substantially interested and its assets are subjected to wealth tax. ..... question that arises is whether the value of the portion of the building which was let out by the assessee in favour of punjab national bank would be an exempted asset from the list of assets found in section 40(3) of the finance act 1983? ..... for letting out the properties, the company was owning the property as a landlord and therefore,that part of the building let out to punjab national bank was exigible to wealth tax under section 40(3) of the finance act,1983. ..... it was therefore held held that the property was used by the assessee for its business and therefore, the assessee would be entitled to exemption as provided under section 40(3)(iv) of the finance act, 1983. ..... ,' : [2001]248itr629(bom) and submitted that the income of the property was treated as business income under the income tax act and therefore, the asset of the assessee should be taken as a business asset. ..... 'therefore, the fact that the income from the property was assessed as business income under the income tax act is not conclusive. .....
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