9911796707
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Issues:
1. Determination of market value of closing stock for wealth tax assessment. 2. Interpretation of provisions of rule 2B(2) of the Wealth-tax Rules, 1957. 3. Application of Foreign Exchange Regulation Act in valuation of stock. 4. Eligibility of exemption under section 5(1)(xxxii) of the Wealth-tax Act, 1957. Analysis: Issue 1: Determination of market value of closing stock for wealth tax assessment The case involved disputes regarding the valuation of closing stock for wealth tax assessment for the assessment years 1974-75 and 1975-76. The Wealth-tax Officer had valued the closing stock based on export invoice value, leading to significant increases in the assessed value. However, the Appellate Assistant Commissioner and the Income-tax Appellate Tribunal disagreed with this approach, emphasizing that the export invoice value should not be the sole basis for determining market value. The Tribunal suggested a deduction of 35% from the export invoice value to arrive at a fair market value. The court upheld the Tribunal's decision, stating that the Tribunal's estimation of market value based on a deduction of 35% was a factual finding and not a question of law for reference. Issue 2: Interpretation of provisions of rule 2B(2) of the Wealth-tax Rules, 1957 The Revenue contested the Tribunal's decision on the application of rule 2B(2) of the Wealth-tax Rules, 1957. The Tribunal had ruled that no addition to the net wealth could be made under rule 2B(2) as the fair market value of the closing stock, determined by deducting 35% from the export invoice value, did not exceed 20%. The court found no error in the Tribunal's interpretation and application of rule 2B(2) and dismissed the Revenue's appeal. Issue 3: Application of Foreign Exchange Regulation Act in valuation of stock The Revenue raised a question regarding the application of section 18 of the Foreign Exchange Regulation Act in determining the market value of the closing stock. However, it was noted that the Revenue had not advanced any argument based on this provision before the Tribunal. As a result, the court held that this question did not arise from the Tribunal's order and could not be considered for reference. Issue 4: Eligibility of exemption under section 5(1)(xxxii) of the Wealth-tax Act, 1957 The eligibility of exemption under section 5(1)(xxxii) of the Wealth-tax Act, 1957, for an industrial undertaking was also questioned. The Tribunal had allowed the exemption for the assessee, M/s. Cosmopolitan Trading Corporation, Jaipur. The court did not find any merit in the Revenue's arguments challenging this exemption and dismissed the petitions. In conclusion, the court dismissed the petitions filed by the Revenue, upholding the Tribunal's decisions on the valuation of closing stock, application of rule 2B(2), and eligibility for exemption under the Wealth-tax Act.
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