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Issues:
1. Deductibility of provision for tax liability in valuation of unquoted shares. 2. Inclusion of C.D.S deposit in taxable asset for wealth tax assessment. Analysis: 1. The first issue revolves around the deductibility of the provision for tax liability while valuing unquoted shares. The Wealth-tax Officer initially valued the shares higher by ignoring the provision for tax liability made by the assessee. The Appellate Assistant Commissioner agreed with the assessee's contention that the valuation of shares at a higher value was not justified. However, the Tribunal's decision was influenced by the Supreme Court ruling in Bharat Hari Singhania v. CWT [1994] 207 ITR 1, which held that no deduction, including provision for taxation, would be admissible while valuing unquoted shares under rule 1D of the Wealth-tax Rules. Consequently, the court answered the first question in the negative, favoring the Revenue. 2. The second issue pertains to the inclusion of the C.D.S. deposit in the taxable asset for wealth tax assessment. The assessee argued that the C.D.S. deposit should not be considered part of their wealth, citing a Calcutta High Court decision and the provisions of section 7A of the Compulsory Deposit Scheme (Income-tax Payers) Act, 1974. The court analyzed section 7A, which deems compulsory deposits exempt for wealth tax purposes, akin to deposits with a banking company under the Wealth-tax Act. As a result, the court held that the amount deposited as C.D.S. should be exempt from inclusion in the net wealth of the assessee. Consequently, the second question was answered in the affirmative, favoring the assessee and against the Revenue. In conclusion, the court ruled against the deductibility of provision for tax liability in valuing unquoted shares but in favor of excluding the C.D.S. deposit from the taxable asset for wealth tax assessment.
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