Seth Rasesh N. Mafatlal vs Commissioner of Wealth-tax

Mrs. Sujata V. Manohar, J.—The following questions are referred to us u/s 27(1) of the Wealth-tax Act, 1957, at the instance of the assessee and at the instance of the Department :

At the instance of the assessee :

"(i) Whether the Tribunal erred in law in holding that rule 1D of the Wealth-tax Rules, 1957, was mandatory in valuing the 4,229 shares of Surat Cotton Spg. and Wvg. Mills Pvt., Ltd., at the valuation date March 31, 1968 and in confirming the valuation at Rs. 211 per share based on that rule ?

(ii) Whether the Tribunal ought to have held that the said 4,229 shares of Surat Cotton Spg. and Wvg. Mills Pvt., Ltd., ought to have been valued at Rs. 175 per share, as was valued by approved valuers u/s 24(6) in the connected case of Smt. Kusumben D. Mahadevia V. N. C. Upadhya and Others Kusumben D. Mahadevia Vs. Commissioner of Wealth-tax, Bombay City-I, ?

(iii) Whether rule 1D in so far as it goes beyond the substantive provisions of valuation contained in section 7(1) is invalid and/or ultra vires the rule making power of the Board u/s 46(2) of the Act and suffered from the vice of excessive legislation ?"

At the instance of the Commissioner :

"Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the liabilities as shown in the balance-sheet are not to be reduced by the amount paid as advance-tax in terms of rule 1D of the Wealth-tax Rules, 1957 ?"

It is an accepted position that questions (i) and (ii) which are at the instance of the assessee are governed by the ratio laid down by this court in the case of Smt. Kusumben D. Mahadevia V. N. C. Upadhya and Others Kusumben D. Mahadevia Vs. Commissioner of Wealth-tax, Bombay City-I, .

Accordingly, question No. (i) at the instance of the assessee is answered in the affirmative and in favour of the assessee.

Regarding question No. (ii) at the instance of the assessee the shares ought to have been valued at Rs. 175 per share as per the valuation made by the approved valuer.

Question No. (iii) at the instance of the assessee need not be answered in view of our answer to questions Nos. (i) and (ii).

It is also an accepted position that the question raised at the instance of the Commissioner is covered by a decision of this court in the case of Commissioner of Wealth-tax Vs. Pratap Bhogilal and another, . The question is, accordingly answered in the affirmative and in favour of the assessee.

No order as to costs.