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TMI Blog1980 (3) TMI 30X X X X Extracts X X X X X X X X Extracts X X X X ..... of valuation.. However, in respect of the shares held by the assessee in foreign companies, the WTO valued the shares at the market value which was shown in the balance-sheet in the inner column against the entry relating to these assets. The value shown in the balance-sheet as well as the market value of the shares shown in the inner column was as follows: 1957-58 1958-59 1959-60 Rs. Rs. Rs. Value shown in balance-sheet 23,05,039 22,33,505 23 42,942 Market Value 45,40,180 36,37,401 42,51,828 The assessments made by the WTO taking into account the market value of the shares was confirmed by the AAC who dismissed the appeal filed by the assessee. When the assessee took up the matter to the Appellate Tribunal in appeal, it was con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... much higher than the value of these shares as disclosed in the balance-sheet, the WTO, while adopting the global method of valuation under s. 7(2)(a), had power to reject the value of the assets, namely, the shares in question as shown in the balance-sheet and in its place take the market value of the shares and according to the learned counsel, there was no justification for valuing the shares at cost value when, admittedly, even according to the assessee, the market value was much higher than what was adopted for the purposes of the balance-sheet. Shri Dinesh Vyas, appearing on behalf of the assessee-company, has not disputed the power of the WTO to adopt a different valuation of an asset from the one shown in the balance-sheet. But, Shr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rily requires the WTO to accept in all cases the balance-sheet of the company for the purposes of computing the net wealth of the company. It is argued that the circular issued by the Board only directs that the global valuation method should be " ordinarily applied " in case of business and particularly so in the case of a company and that this circular does not deprive the WTO of his discretion to find out whether any particular item of asset is undervalued in the balancesheet. It is argued that if it is found that any asset is undervalued for the purposes of wealth-tax assessment, the market value: of such asset can be taken into account for the purposes of assessment to wealth-tax. Now, on principle, there is no difficulty in holding t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... balance-sheet should be taken as the primary basis of valuation and if any adjustment is required it is open to the Wealth-tax Officer to make such an adjustment in the valuation as given in the balance-sheet as may be necessary in, the circumstances of the case. " There is, therefore, no doubt that if on the circumstances of any case the WTO finds that an adjustment in the valuation of an asset shown in the balance-sheet is necessary, he is competent to do so even while accepting the global method of valuation. The question which has been raised by Shri Vyas, however, is that according to the directions of the Board as contained in the circular referred to, above, unless the WTO suspects any fraud on the part of the assessee or unless t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cts that any particular asset has been undervalued in the balance-sheet. Therefore, where a particular asset has been shown to be undervalued in the balance-sheet and the WTO having regard to the provisions of s. 7(1) takes the view that the said asset should be valued at the market value, he is neither discarding the global method of valuation nor can he be said to be acting contrary to the circular issued by the Board on which reliance is placed on behalf of the assessee-company. In the instant case, the market value of the shares in question is indicated by the assessee itself in its balance-sheet. However, for the purposes of the balance-sheet only the cost value of the shares has been taken. Section 7(1) of the Act provides that the v ..... X X X X Extracts X X X X X X X X Extracts X X X X
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