Wealth tax
This query is : Resolved
07 January 2011
What will be in case of theft of jwellery on 30th march, will it liable for wealth tax?
And what will happen if same found after 31st march i.e. After valuation date ?
And what will happen if same found after 31st march i.e. After valuation date ?
08 January 2011
The assessee will be very lucky if he gets the jewellery back.
As he is the owner of the jewellery AS ON 31ST MARCH also (as if it was kept at different place, without the loss of ownership) he is liable for wealth tax. Had he not received back the jewellery till the date of return filing date , then he may not show as his wealth.
As he is the owner of the jewellery AS ON 31ST MARCH also (as if it was kept at different place, without the loss of ownership) he is liable for wealth tax. Had he not received back the jewellery till the date of return filing date , then he may not show as his wealth.
Message likes :
1 times
Guest
Guest
(Expert)
08 January 2011
No, the jewellery so stolen can not be the part of net wealth of the assessee as on valuation date as it's valuation will be zero as per provisions of schedule-III because it could not have fetch more than zero if sold on valuation date.
In case, stolen jewellery recovered back, even then it will be taken at zero as on valuation date because it could not have fetch more than zero if sold on valuation date as it was not possible to sell on valuation date
In case, stolen jewellery recovered back, even then it will be taken at zero as on valuation date because it could not have fetch more than zero if sold on valuation date as it was not possible to sell on valuation date
08 January 2011
valuation does not mean by physical status of the aseets. I am not agree with Mr. Moondra, Mr Bafna has correctly replied the query.
Guest
Guest
(Expert)
08 January 2011
Please also read definition of Net Wealth u/s 2(m) along with Sec. 7 and Schedule-III of the WT Act. No doubt, stolen jewellery is the contingent asset of the assessee but it has no value on date of valuation as it is not saleable in open market on the valuation date and it can not fetch any value if it is sold on valuation date. And try to develope the legal position positively
Message likes :
1 times
08 January 2011
Yes Mr Mundra you are absolutely right. Please follow the link in which I have replied almost on the same line of yours.At that time the question was -
What will be in case of theft of jwellery on 30th march, will it liable for wealth tax?
https://www.caclubindia.com/experts/wealth-tax-560520.asp
Now in this, 2nd question has been added by Mr Parsai-
And what will happen if same found after 31st march i.e. After valuation date ?
I have checked that the person is going to
become a CA and he will start soon his (not this) Practice.
If this would be taken as a tax planning measure, Assets will disappear on the valuation date and will appear after the valuation date.
Actually it would be allowed, but in Practice we should take care of such practices as the client has lost nothing and being a consultant we have to guide him so that he would not face any harassment.
Secondly, after giving due thought to the problem which would arise in the very next year to the assessee, when he will show his net wealth by showing the "lost and found" jewellery. He will be unncessarily inquired in the doubt of undisclosed income.
Experience and practical approach says that it's better to pay wealth tax @ 1% on jewellery than
meeting the demand of officers.
The department would never reject your claim if you show the jewellery as part of your net wealth on valuation date.
Whereas it will be difficult to practically appear before the WTO when the lost welath will reappear.
On the above ground, it is hoped that suggestion
given by Mr Bhagat and my self are more valuable than the plain reading of law.
What will be in case of theft of jwellery on 30th march, will it liable for wealth tax?
https://www.caclubindia.com/experts/wealth-tax-560520.asp
Now in this, 2nd question has been added by Mr Parsai-
And what will happen if same found after 31st march i.e. After valuation date ?
I have checked that the person is going to
become a CA and he will start soon his (not this) Practice.
If this would be taken as a tax planning measure, Assets will disappear on the valuation date and will appear after the valuation date.
Actually it would be allowed, but in Practice we should take care of such practices as the client has lost nothing and being a consultant we have to guide him so that he would not face any harassment.
Secondly, after giving due thought to the problem which would arise in the very next year to the assessee, when he will show his net wealth by showing the "lost and found" jewellery. He will be unncessarily inquired in the doubt of undisclosed income.
Experience and practical approach says that it's better to pay wealth tax @ 1% on jewellery than
meeting the demand of officers.
The department would never reject your claim if you show the jewellery as part of your net wealth on valuation date.
Whereas it will be difficult to practically appear before the WTO when the lost welath will reappear.
On the above ground, it is hoped that suggestion
given by Mr Bhagat and my self are more valuable than the plain reading of law.
Message likes :
2 times
12 January 2011
It seems Mr. Deepak Parsai wants to start his practice as a Wealth Tax Consultant as soon as he qualifies CA.
.
Such hypothetical questions are generally raised by clients before practising CAs.
.
Why ?
.
Because CAs don't charge any fee for such questions.
.
Now first of all; I wish to raise the following queries before him :
.
Whether FIR has been lodged and the assets have been debited to the Capital account if it appears in the Balance Sheet ?
.
From practical views; I agree with Mr. Paras Bafna.
If you follow his practice, then surely there would not be a single case that Assessing Officer can harass you.
.
In case; you wish to fight with the department then the practices adopted by Mr. K C Moondra seems suitable.
.
In this way; you can easily pass 3-4 years with your clients as well as with the department which will help you to establish your practice very soon.
.
.
Such hypothetical questions are generally raised by clients before practising CAs.
.
Why ?
.
Because CAs don't charge any fee for such questions.
.
Now first of all; I wish to raise the following queries before him :
.
Whether FIR has been lodged and the assets have been debited to the Capital account if it appears in the Balance Sheet ?
.
From practical views; I agree with Mr. Paras Bafna.
If you follow his practice, then surely there would not be a single case that Assessing Officer can harass you.
.
In case; you wish to fight with the department then the practices adopted by Mr. K C Moondra seems suitable.
.
In this way; you can easily pass 3-4 years with your clients as well as with the department which will help you to establish your practice very soon.
.
Message likes :
4 times
Guest
Guest
(Expert)
13 January 2011
One should always think for savings of his clients and for all possible remedies.
Guest
Guest
(Expert)
13 January 2011
Dear Surendra Ji,
Please be don't be irritated if some one argues continuously. If you felt that it was a hypothetical query, you could have avoided your participation. No doubt, you r a senior expert on this site but you should not demoralise any queriest if he is not satisfied with the replies. We have no compulsion for participating with the queries.
Please be don't be irritated if some one argues continuously. If you felt that it was a hypothetical query, you could have avoided your participation. No doubt, you r a senior expert on this site but you should not demoralise any queriest if he is not satisfied with the replies. We have no compulsion for participating with the queries.
18 January 2011
Thanks to all experts.
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- Inventory of finished goods
- Confusion around Form 26QB fields
- Can we claim ITC of Feb-2024 in the month of November-2024 which was not claimed by oversight
- Clarification on Documentation of Paid-Up Capital Contribution by Directors
- REGARDING 25 AS DATE OF PAYMENT AND DATE OF BOOKING
- Disallowance of Section 43B(h) to sez units
- RCM INVOICING FROM NOV-2024
- Tds on building rent monthly
- GST Regis.
- Sale of property furniture sale
- Is correct way to find out capital of individual on 31st March
- LAST YEAR 2022-23 ITC IN NEXT YEAR 2023-24 REPORITNG IN GSTR-9
- MIS MATCH OF INVOICE NUMBER
- IGST Credit-Show cause notice issued-confusion
- Issue of gst e invoice
- How to adjusted advances given or receipt
- Foreign vendor without PAN unable to to register due to non receipt of OTP on foreign number ?
- 133(6) DIN INVALID format error - ->WHERE TO REPLY 133(6) notice?
- Query for dubts
- Regarding einvoice taken on nil rated sales
Trending Online Classes
CAclubindia
