1990 (7) TMI 71 - HC - Wealth-tax

Summary

Issues:
Valuation of shares held by the assessee in Peninsular Plantations Ltd. for assessment years 1957-58, 1958-59, and 1959-60.
Validity of the direction given by the Appellate Assistant Commissioner to adopt the purchase price of shares as the market value.

Analysis:
The judgment pertains to wealth-tax proceedings concerning the valuation of shares held by the assessee in Peninsular Plantations Ltd. for the assessment years 1957-58, 1958-59, and 1959-60. The Wealth-tax Officer reopened the assessments to include the value of an asset termed "controlling interest" due to the assessee purchasing shares at rates higher than those quoted in the stock exchange, indicating a potential controlling interest acquisition. The Appellate Assistant Commissioner upheld the reassessments, directing the adoption of the enhanced purchase price paid by the assessee as the market value of the shares. The Appellate Tribunal later set aside this direction, leading to subsequent appeals and a common order dated October 15, 1984, where the Appellate Tribunal allowed the Revenue's appeals and dismissed those of the assessee.

The first issue revolves around confirming the valuation of the shares, with the Appellate Tribunal ultimately deciding to restore the valuation made by the Wealth-tax Officer, rather than confirming the Appellate Assistant Commissioner's valuation. The second crucial issue involves the direction given by the Appellate Assistant Commissioner to adopt the purchase price of shares as the market value. The Appellate Assistant Commissioner's order clearly directed the Wealth-tax Officer to consider the enhanced purchase price paid by the assessee as the market value for the entire block of shares, a direction that was carried out by the Wealth-tax Officer in the revised proceedings.

The judgment emphasizes that the parties proceeded on the common ground that they were bound by the findings in the appellate orders dated December 31, 1975. The Appellate Tribunal correctly held that the Appellate Assistant Commissioner had directed the adoption of the purchase price of the shares as the market value. Consequently, both questions posed were answered against the assessee and in favor of the Revenue, affirming the valuation adopted by the Wealth-tax Officer. The judgment concludes by disposing of the references and directing the forwarding of a copy of the judgment to the Income-tax Appellate Tribunal, Cochin Bench.