1979 (11) TMI 174 - AT - Wealth-tax

Summary

Issues: Valuation of colliery shares for wealth tax assessment

In this case, the Department appealed against the order of the AAC regarding the valuation of colliery shares for wealth tax assessment for the assessment year 1975-76. The primary contention was the valuation of 1600 shares of a coal company that had been nationalized. The WTO included the amount of Rs. 39,924 in the total wealth of the assessee due to the lack of proof that the government had taken over the company without compensation. The assessee argued before the AAC that the valuation of the shares should not be estimated at Rs. 39,924, citing a previous case where similar shares were valued at nil post-nationalization. The AAC agreed with the assessee, noting that the compensation for nationalized collieries was negligible, and deleted the addition of Rs. 39,924. The Department then appealed, claiming that the valuation of the colliery shares should not be considered nil due to government compensation for nationalized collieries. The Department's representative supported the WTO's order, while the assessee's counsel supported the AAC's order. The assessee's counsel presented evidence showing that the value of shares in a similar case was considered nil post-nationalization. The counsel also referenced a legal case stating that if compensation is not paid, it cannot be considered for wealth tax purposes. The judgment emphasized that the government had not taken over the liabilities of the nationalized companies, and the compensation, if any, would not be sufficient to cover the liabilities. The tribunal upheld the AAC's order, stating that it was a reasonable decision given the circumstances, and dismissed the appeal.