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Issues:
1. Interpretation of valuation of unquoted equity shares under the Wealth-tax Act. 2. Determination of the mandatory nature of rule 1D of the Wealth tax Rules. Analysis: The judgment pertains to tax cases petitions filed by the Commissioner under the Wealth-tax Act, seeking a direction for the Tribunal to refer common questions of law to the High Court. The dispute revolves around the valuation of unquoted equity shares held by the assessee, initially declared on a yield basis and later challenged by the Commissioner. The Commissioner contended that the shares should have been valued under rule 1D of the Wealth tax Rules, i.e., the break-up method, rather than the yield basis. Consequently, the Commissioner set aside the assessments and directed revaluation. The Tribunal, however, relying on precedent judgments, including Mammen v. WTO and CGT v. Kusumben D. Mahadevia, overturned the Commissioner's orders and restored the original assessments, prompting the Revenue to file reference applications. The Tribunal initially refused to refer the questions of law to the High Court, leading to the present tax case petitions. In the absence of the assessee's representation, the court heard arguments from the Revenue's counsel, highlighting the Supreme Court's decision in Bharat Hari Singhania v. CWT. The Supreme Court in this case emphasized the mandatory nature of valuing unquoted shares using the break-up method under rule 1D of the Wealth tax Rules, precluding any discretion for the Assessing Officer. Citing this precedent, the court concluded that common questions of law arose, directing the Tribunal to refer the questions for the High Court's opinion. Consequently, the tax case petitions were disposed of in favor of the Revenue, emphasizing the compulsory application of the break-up method for valuing unquoted shares under the Wealth-tax Act. This judgment underscores the significance of adhering to the prescribed valuation method for unquoted equity shares under the Wealth-tax Act. It clarifies that the break-up method outlined in rule 1D of the Wealth tax Rules is obligatory, as established by judicial precedents. The court's decision reinforces the uniform application of valuation principles to ensure consistency and compliance with statutory provisions, thereby upholding the integrity of wealth tax assessments.
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