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TMI Blog1984 (3) TMI 54X X X X Extracts X X X X X X X X Extracts X X X X ..... hown by the assessee as Rs. 83,200 at the rate of Rs. 20.80 per share. The Wealth-tax Officer (hereinafter referred to as "the WTO ") while examining the balance-sheet of M/s. Oswal Woollen Mills Ltd. found that the assessee had not properly valued the shares of the company. He determined the break-up value of the shares at Rs. 61.03 per share and adopted 82% of the break-up value of the shares as the market value on the valuation date. On that basis he worked out the value of the shares at Rs. 50.04 per share. Consequently, he determined the total value of the shares at Rs. 2,00,160. After the completion of the assessment, the assessee made an application under s. 35 of the W.T. Act, 1957, for rectification of the value of the shares as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Add current tax 3,80,140 --------- 25,23,956 --------- ----------- 60,53,388 1,17,23,526 Deductible liabilities 60,53,388 ----------- Net assets 56,70,138 No. of equity shares 94,933 Break-up value per share Rs. 59.73 77 1/2% thereof Rs. 46.29 The revised ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he findings of the AAC. On an application of the assessee under s. 27(1) of the Act, the following question of law has been referred to this court for its opinion: "Whether, on the facts and circumstances of the case, the interpretation of sub-clause (e) of clause (ii) of Explanation II to rule ID of the Wealth-tax Rules, 1957, is correct ?" Mr. Gupta, learned counsel for the assessee, has argued that the interpretation taken by the Tribunal is not warranted. He urges that under sub-cl. (e) of cl. (ii) of Expln. II to r. ID of the W.T. Rules, 1957, the provision for taxation made on the book profits of the company should be treated as liabilities. If there is any excess in the amount shown by way of provision for taxes over what would ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the rule operate in two different fields altogether. Clause (i)(a) operates in the field of actual payment of advance tax. Clause (ii)(e) operates in the field of excess provision for taxation, other than the provision for taxation regarding advance tax. For the purpose of computation of the market value of the shares of a company, the advance tax paid and shown on the assets side of the balance-sheet of the company cannot be deducted from the tax payable in determining whether the provision for taxation is in excess over the tax payable with reference to the book profits in accordance with the law applicable thereto within the meaning of cl. (ii)(e) of Expln. II. We have given due consideration to the argument but regret our inability to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts and cl. (ii) with the amounts on the liabilities side in the balance-sheet which are not to be treated as liabilities. Under sub-cl. (a) of cl. (i), any amount paid as advance tax and shown as an asset in the balance-sheet of a company is not to be treated as an asset, and under sub-cl. (e) of cl. (ii), the difference between the amount representing provision for taxation and amount payable as tax on the book profits is not to be treated as a liability. It is well settled that various clauses in a rule should be interpreted harmoniously. In sub-cl. (e) the words " the tax payable with reference to the book profits " are important. These words connote the amount of tax due from a company after deducting the advance tax and not the whole o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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