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Issues Involved:
1. Taxability of amounts deposited under the Compulsory Deposit Scheme. 2. Valuation of shares of Bajaj Auto Limited and Bajaj Tempo Limited. 3. Valuation of the assessees' interests in partnership concerns/A.O.Ps. Issue-Wise Detailed Analysis: Common Issue No. 1: The amounts deposited by the assessees under the Compulsory Deposit Scheme The assessees argued before the Wealth Tax Officer (W.T.O.) that the amounts deposited under the Compulsory Deposit Scheme (C.D.S.) were exempt from wealth-tax, citing the Delhi Tribunal's decision in WTO v. S.D. Nargolwala [1983] 5 ITD 690. However, the W.T.O. rejected this claim, referencing section 7A of the C.D.S. (I.T. Payers) Act, 1974, which deems such deposits as deposits with a banking company under the Banking Company Regulation Act, 1949. Consequently, the W.T.O. brought the sums to tax. The assessees' appeal to the Commissioner of Wealth Tax (C.W.T.) (Appeals) was unsuccessful, as the Nagpur Bench of the I.T.A.T. had previously ruled in favor of the Department on this issue. The Tribunal, agreeing with the I.T.A.T.'s prior decision, dismissed the assessees' grounds of appeal on this issue. Common Issue No. 2: Valuation of the shares of M/s. Bajaj Auto Limited and Bajaj Tempo Limited The assessees valued the shares based on Poona Stock Exchange quotations, arguing that the registered offices of the companies and the assessees' residences were in Poona. The W.T.O., however, preferred Bombay Stock Exchange quotations, citing that the assessees had historically used Bombay quotations, and the business affairs were managed from Bombay. Additionally, the W.T.O. noted negligible differences in stock prices between the two exchanges around the valuation dates. The C.W.T.(Appeals) upheld the W.T.O.'s decision, emphasizing the doctrine of "predominant economic interest and commercial operations" and the consistency of using Bombay quotations. The Tribunal, however, sided with the assessees, noting their consistent use of Poona quotations since the Poona Stock Exchange's establishment and the bona fides demonstrated by adopting higher Poona quotations when applicable. The Tribunal found no evidence of manipulation of Poona quotations and preferred the assessees' valuation method, setting aside the C.W.T.(Appeals)'s orders and directing the W.T.O. to accept the Poona quotations. Common Issue No. 3: Valuation of the assessees' interests in partnership concerns/A.O.Ps. This issue had two facets: the method of accounting for tax liabilities and the valuation of shares held by partnerships/A.O.Ps. For the latter, the Tribunal directed the W.T.O. to use Poona quotations, consistent with their ruling on Common Issue No. 2. Regarding the method of accounting for tax liabilities, the assessees argued for using the gross provision for taxation without reducing it by advance tax paid, citing the Gujarat High Court's decision in CWT v. Ashok K. Parikh [1981] 129 ITR 46. The W.T.O. and C.W.T.(Appeals) preferred the net provision method, referencing decisions from the Punjab and Haryana High Court and the Karnataka High Court. The Tribunal disagreed, emphasizing that rules 2D and 2E of the Wealth-tax Rules, 1957, did not support reducing the gross provision by advance tax paid. They noted that the Bombay High Court in CWT v. Pratap Bhogilal [1987] 167 ITR 501/32 Taxman 438 supported treating the gross provision as a liability. Thus, the Tribunal allowed the assessees' appeals on this issue. Conclusion: The Tribunal dismissed the assessees' appeals concerning the taxability of amounts deposited under the Compulsory Deposit Scheme. However, it sided with the assessees on the valuation of shares, directing the use of Poona Stock Exchange quotations, and on the method of accounting for tax liabilities in partnership concerns/A.O.Ps., supporting the use of the gross provision for taxation without reduction by advance tax paid.
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