COMMISSIONER OF WEALTH-TAX, BHOPAL vs ABDUL HUSSAIN MULLA MUHAMMAD ALI (DEAD) BY L.Rs.

The Supreme Court ruled that the loan termed 'Quaraza-e-Hasana' advanced by the assessee to his partner is includible in the wealth of the assessee under the Wealth Tax Act, 1957, specifically Sections 5 and 27. The Court found that no authoritative text or principle of Muslim Law was presented to establish the nature of 'Quaraza-e-Hasana', thus rejecting the claim that it constituted a debt of good faith without legal obligation. The appeal was allowed, affirming the inclusion of the loan amount in the taxable wealth of the assessee.