ORDER
Grover, Judicial Member
1. This second appeal is directed against the order dated 30th of November, 1987 passed by the Commissioner of Wealth-tax (Appeals)-II, New Delhi, in respect of assessment year 1982-83, the related assessment having been framed on 2nd of December, 1985 under Section 16(3) of the Wealth-tax Act, 1957. The valuation date as mentioned in the assessment order was 31st March, 1982.
2. The first grievance is that the Commissioner of Wealth-tax (Appeals) erred in not directing deduction of Rs. 90,270 as debt owed by the appellant as it was held in trust for M/s. K.G-. Khosla Compressors Ltd., of which the assessee was Managing Director, since its inception. The second contention in ground No. 3 is with regard to taking the valuation of equity shares of Khosla Foundry Limited as per Rule 1-D of the Wealth-tax Rules, 1957 as against claim of yield method, the accounting year of the said company having ended on 30th of December, 1981 as against the valuation date of the assessee which as mentioned above was 31st March, 1982. The third question raised is against the CWT(A)’s order in not accepting the assessee’s claim that a sum of Rs. 2,44,479 which represented compulsory deposit under the C.B.S. Scheme was beyond the scope of wealth-tax assessment. Shri H.S. Gulati, Advocate, very persistently reiterated the contention raised before the lower authorities and for the Revenue, Shri R.V. Ramanan, Deptt. Representative, with equal force supported the order of the Commissioner of Wealth-tax (Appeals) particularly in relation to question Nos. 1 and 2.
3. As far as the first issue is concerned, though in the original return, the assessee added Rs. 90,270 which represented part of remuneration paid, but later the assessee revised his return and took the stand that since the increased remuneration was not authorised by the Central Govt., pending such authorisation it must be treated as money held in trust.
4. In terms of company Board resolution dated 22nd December, 1975 the assessee’s remuneration was fixed. The said Board’s resolution was approved at the annual general meeting held on 24th of December, 1979 effective from 22nd December, 1980. It may be stated here that there were certain guidelines of the Central Govt. in relation to salaries of Managing Directors of companies, but the same had held to be not operative by various High Courts. The assessee, however, got salary for the financial year 1-4-1981 to 31st March, 1982 amounting to Rs. 1,40,800 and salary between 22nd December, 1980 to 31st March, 1981 amounted to Rs. 38,720. In the revised wealth-tax return filed for the valuation date 31st March, 1982, the assessee’s claim was that it had received excess salary amounting to Rs. 90,250 and though for the financial year ending 31st March, 1982 the excess remuneration was of the order of Rs. 72,000 for the period up to 31-3-1981, the excess received was of the order of Rs. 19,270. The total of the two was claimed to be not taxable under the Wealth-tax Act though it was not even asserted that the assessee’s claim under the Income-tax Act had been that it was liable to be taxed only on the salary as per guidelines of the Central Govt. and not on the basis of actual receipts In other words, the assessee’s income-tax assessments are based on the actual receipts and not on any notional basis as was the case sought to be made out for wealth-tax purposes. Even up to the time of hearing before us, which was on 13th of October, 1988, it was not stated that any part of the salary was refunded or any claim was made by the employer-company. On the other hand, it was accepted that from 1984 onward the sanction had been accorded by the Central Govt., but up to 1984 it was not given because of some pending dispute in the Supreme Court. On the above facts as also on the facts stated by the Commissioner of Wealth-tax (Appeals), we find no case for the assessee to escape assessment in relation to Rs. 90,270 which not only belonged to the assessee but he had full domain over the money utilisation. The assessee, therefore, fails.
5. to 7. [These paras are not reproduced here as they involved minor issues.]
