9911796707
TMI Blog1986 (7) TMI 215X X X X Extracts X X X X X X X X Extracts X X X X ..... he WTO 'L' Ward, Pune under 16(1) of the WT Act accepting the figure of net wealth shown as per return on 23rd Nov., 1981. It appears that the CWT, Pune issued a notice under s. 25(2) of the WT Act for both these years on 8th July, 1983 because he felt that the assessment completed by the WTO under s. 16(1) on 23rd Nov., 1981 were erroneous and prejudicial to the interests of the Revenue mainly because the WTO had not worked out the value of the shares held by the assessee in M/s Dalco Engineering Pvt. Ltd. and M/s Sealol Hindustan Pvt. Ltd. as per r. 1D of WT Rules as these shares were not quoted in the stock-exchange. In the notice the WTO also referred to valuation of market value of the flat owned by the assessee. It appears that this a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... culation made by the CWT that is challenged in the present appeals. 3. Shri Gadgil appearing for the assessee pointed out that the break-up value as per r. 1D was filed by the assessee with the WTO, copies of such working have also been filed before us by Shri Gadgil and this working was accepted by the WTO. Shri Gadgil argued that the valuation of shares so made filed with the CWT was in terms of Rule 1D and such valuation was made in accordance with the principles laid down by the Gujarat High Court decision in CWT vs. Ashok K. Parekh (1981) 129 ITR 46 (Guj). Shri Gadgil further argued that he had only agreed to supply the relevant information that would enable the WTO to work out the valuation of the shares on yield basis without preju ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rementioned decisions and not as interpreted by the Gujarat High Court in (1981) 129 ITR 46 (Guj). Alternatively and without prejudice Shri Srinivasan argued that if Rule 1D is not to be applied the correct working on yield method should have been given by the assessee in which the yield of return should have been adopted at 12 per cent and not 15 per cent as adopted by the assessee. 5. We have carefully considered the submissions made by the representative of contesting parties it would appear that there was prima facie an error made by the ITO in the method of calculation of shares in terms of r.1D as laid down under the WT Rules. It is this error in calculation which was intended to be corrected by the CWT when he started proceedings u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... et and under sub-cl. (E) of cl. (iii) only the difference between the amount representing provision for taxation and the amount payable as tax on the book profits is to be treated as a liability. The same principles were followed by the Madras High Court in (1985) 152 ITR 599 (Mad). 6. In the result, the order of the CWT will stand modified as indicated above. The WTO is directed to recalculate the value of the shares in the light of the above discussion, for the asst. yrs. 1980-81 and 1981-82. 7. The appeals for asst. yrs. 1983-84 and 1984-85 are against a consolidated order of the AAC dt. 25th July, 1985 and the issue involved is the same, viz. Valuation of shares of M/s Dalco Engg. Works and M/s Sealol Hindustan Ltd. For these two ye ..... X X X X Extracts X X X X X X X X Extracts X X X X
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