1986 (8) TMI 99 - AT - Wealth-tax

Summary

Issues:
1. Treatment of advance tax in determining the value of unquoted equity shares.
2. Challenge to the reopening of assessment under section 17 of the Wealth-tax Act, 1957.

Detailed Analysis:
1. The appeals before the Appellate Tribunal ITAT BOMBAY-A involved the treatment of advance tax in determining the value of unquoted equity shares for the assessment years 1973-74 to 1977-78. The grievance was against the direction of the AAC that advance tax should not be deducted from the tax payable when working out the value of unquoted equity shares under rule 1D of the Wealth-tax Rules, 1957. The departmental representative cited rulings from different High Courts that supported deducting advance tax from the tax payable for this purpose. The Tribunal considered these rulings and held that advance tax should indeed be deducted to determine the excess amount representing provision for taxation, reversing the AAC's order and restoring the WTO's order.

2. The assessee's counsel raised a challenge to the reopening of assessment under section 17 of the Wealth-tax Act, 1957, for the assessment years 1973-74 to 1976-77. The counsel argued that since the challenge to the reopening was not considered or adjudicated upon by the AAC, it should be deemed that the ground was decided against the assessee. The departmental representative countered this argument by stating that the non-consideration could be due to various reasons and did not imply a decision against the assessee. The Tribunal agreed with the departmental representative, directing the AAC to verify whether the grounds of appeal challenging the reopening were withdrawn or not pressed, and if not, to deal with them on merits and in accordance with the law after providing a reasonable opportunity for the assessee to be heard.

In conclusion, the Tribunal allowed the appeal for the assessment year 1977-78 and partly allowed the appeals for the assessment years 1973-74 to 1976-77, primarily focusing on the treatment of advance tax in determining the value of unquoted equity shares and addressing the challenge to the reopening of assessment under the Wealth-tax Act.