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Issues Involved:
1. Whether the assessee is a company in which the public are substantially interested under section 2(18) of the IT Act, 1961, and thus not liable to wealth-tax. 2. The valuation of motor cars based on the value adopted by the insurance company. Issue-wise Detailed Analysis: 1. Public Interest in the Company: The first common ground of appeal was the contention that the CWT(A) erred in not accepting the assessee's claim that it was a company in which the public are substantially interested under section 2(18) of the IT Act, 1961, and thus not liable to wealth-tax. The assessee, a limited company incorporated under the Companies Act, 1956, and a subsidiary of Johnson & Johnson Limited, India, argued that its share capital was substantially held by the public. This claim was rejected by both the assessing officer and the CWT(A). The assessee contended that section 40 of the Finance Act, 1983, which provided for the levy of wealth-tax on companies, took effect from the assessment year 1984-85. They argued that the definition of a company in which the public are substantially interested should be as per section 2(18) of the IT Act, 1961, prior to its amendment on 2-4-1983. The assessee cited the Supreme Court decision in Mahindra and Mahindra Ltd. v. Union of India [1979] 2 SCC 529, arguing that the amendment to section 2(18) should not affect the definition as it was a case of reference by incorporation. The Departmental Representative countered that the amended definition in section 2(18) should apply, as the company must be evaluated based on the relevant valuation date. The argument that the amendment should be ignored was rejected, emphasizing that the decision in Mahindra & Mahindra Ltd.'s case was rendered in a different context. The Tribunal agreed with the Departmental Representative, stating that the amended definition of section 2(18) would govern the chargeability to wealth-tax. The reference to section 2(18) in section 40 of the Finance Act, 1983, was deemed a mere reference, not incorporation. Thus, the amendment could not be ignored, and the assessee's contention was rejected. 2. Valuation of Motor Cars: The second issue was the valuation of motor cars based on the value adopted by the insurance company. The assessee argued that the insurance value did not necessarily represent the market price. The Tribunal found the valuation by the insurance company reasonable, noting the increasing cost of cars over time. The assessee failed to provide evidence showing that the value adopted was excessive or unreasonable. Consequently, the Tribunal upheld the valuation by the insurance company. Conclusion: The appeals were dismissed. The Tribunal held that the amended definition of section 2(18) of the IT Act, 1961, applied for determining whether the company was one in which the public are substantially interested, and the valuation of motor cars by the insurance company was reasonable.
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