1982 (5) TMI 36 - HC - Wealth-tax

Summary

Issues:
1. Interpretation of Rule ID of the Wealth-tax Rules in relation to section 24(6) of the Wealth-tax Act.
2. Revenue's reliance on Rule ID without specific argument before the Tribunal.
3. Justification of Tribunal's decision on valuation method for unquoted shares.
4. Obligation of valuers to follow the method of valuation prescribed by Rule ID.

Analysis:
The judgment addresses the interpretation of Rule ID of the Wealth-tax Rules in connection with section 24(6) of the Wealth-tax Act. The court was tasked with determining whether Rule ID overrides the provisions of section 24(6) and if the revenue can rely on Rule ID without raising specific arguments before the Tribunal. Additionally, the judgment delves into whether the Tribunal was justified in following a valuation method not based on the statutory method provided under Rule 1D and the obligation of valuers to adhere to the valuation method prescribed by Rule ID.

In the case at hand, the assessee valued unquoted shares using a specific method, which was not accepted by the WTO. The AAC and Tribunal subsequently determined the value based on a different valuation method. The revenue, dissatisfied with this valuation, filed appeals before the Tribunal. The Tribunal then appointed valuers to determine the value of the shares, leading to a revised valuation higher than the initial assessment. The Tribunal's decision was challenged, prompting the reference of questions to the High Court for clarification.

The High Court clarified that questions regarding Rule ID did not arise from the Tribunal's order and thus remained unanswered. However, in light of section 24(6) of the Act, the Tribunal's decision to rely on the valuation report was deemed appropriate. The Court highlighted the provision allowing the Tribunal to refer valuation disputes to valuers, emphasizing that the Tribunal must conform to the valuers' decision. The judgment distinguished a previous case, emphasizing that in the present scenario, the Tribunal acted correctly by following the valuers' assessment, despite the method not aligning with Rule ID.

Conclusively, the High Court returned questions 1, 2, and 4 unanswered, while affirming the Tribunal's decision on question 3 in favor of the assessee against the department. The assessee was awarded costs amounting to Rs. 250.