Appropriate remedial action under Rule 1D of W.T.Rules. - Income Tax - 420/CBDT

INSTRUCTION NO. 420/CBDT Dated: May 26, 1972 Section(s) Referred: 16 , Rule 1D of W.T.Rules Statute: Wealth Tax Act, 1957 Attention of the Commissioners is invited to Rule ID of the Wealth-tax Rules, 1957 which prescribes the mode of valuation of the market value of unquoted equity shares of companies other than investment companies, and managing agency companies. In respect of cases where the companies have not paid dividend continuously for 6 years or more accounting years ending on or before the valuation date a discount of 25 per cent is allowed (Rule ID proviso). The scope of the proviso as well as Explanation to Rule ID has been also stated in Board's circular No. 3D(WT) of 1967 issued vide F.NO. 2/2/65-W.T on 15th November. 1967. 2. The Revenue Audit have since pointed out some instance of under-assessments of wealth due to incorrect valuation of shares. In three cases it was found that the W.T. Officer has allowed discount of 35 per cent instead of 25 per cent on the basis of the table appearing at page 105 of the W.T. Manual (Printed in 1969). Though a corrigendum has already been issued by the Directorate RS P as far back as in November, 1971, obviously some W.T. Officers have not carried out the necessary corrections in their copy of W.T. Manual. 3. The Board desire that a review of all such cases, wherein similar errors as found by the Revenue Audit have occurred, should be conducted before June, 1972 and appropriate remedial action taken in all such cases immediately. 4. The contents of this letter may kindly be brought to the notice of all the W.T. Officers working in your charge and it should please be ensured that timely action is taken to rectify the errors.