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TMI Blog1982 (8) TMI 81X X X X Extracts X X X X X X X X Extracts X X X X ..... duced by 10 per cent on an ad hoc basis, for various reasons adduced. Though a substantial number of shares were quoted in the stock exchange, it was claimed that many of them were incapable of being sold and would not also realise the prices listed. Other claims such as expenditure by way of brokerage, etc. In the case of sale, were also advanced to support the reduction. The WTO rejected the claim for reduction in value of the shares and this was upheld by the CWT (A). 2. Before us the ld. Counsel for the assessee has pointed out that the valuation of the shares quoted in the market could be made on the basis of the list value but this was not an infallible method of valuation. The list value only indicated an approximation which could ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ese are all matters of common occurrence in the case of any asset. For wealth-tax purposes the valuation is to be made on the basis of a hypothetical market where a willing seller and a willing purchaser come into contact. According to the ld. Counsel, there was no justification for reducing the market rate to any extent. 4. In our view there is no justification for the reduction claimed. Apart from the fact that for wealth-tax purposes it is a notional value in a hypothetical market which is the basis of valuation, the assessee in the present case is a holder of a substantial number of shares. The share-holdings spread over different companies. Even though a vague allegation that the assessee cannot get the listed price for these shares ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ounsel for the assessee has stressed the point that nothing was recoverable from this party, a company supplying electricity. The winding up Petition against the company was pending in the High Court. Having regard to the assets and liabilities of the said company, there was absolutely no chance of recovering any amount from the debtor. Even today no amount has been recovered. The outstanding amounts should be treated as irrecoverable and of no value and should be deleted from the net wealth. 7. Having heard the ld. counsel for the department, we have to hold that the assessee's claim to entirely delete the alleged amount outstanding from this party from the net wealth cannot be accepted. In the first place as validly noted by the CWT (A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ven by the assessee the amounts to be deleted from this account would be Rs. 8,083. Rs. 11,253, Rs. 9,383, Rs. 9,283 and Rs. 10,371 for each of the years under appeal. 8. The Balance-sheet for the year ending Diwali of 1956 showed a sum of Rs. 25,17,260 outstanding from M/s Harinagar Sugar Mills Ltd. In Part IV of the Return for the assessment of each of the years under appeal the assessee claimed deduction of a sum of 25 lakhs by way of "sale proceeds of cane farm with interest. In the letter accompanying the return it was pointed out by the assessee that the sum of Rs. 25 lakhs represented the balance of the sale price of M/s Harinagar Cane Farm and the same was disputed by the company as not payable on the ground that no amount was du ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... received, the balance of Rs. 25,00,000 was not paid by M/s. Harinagar Sugar Mills Ltd. Which disputed the claim as not owing to the assessee at all. At any rate, it could belong to the 4 individuals. A suit for recovery of the amount is still pending. It is claimed that for the above reasons this asset should not be taken into account in computing the net wealth at all. 11. For the department stress is laid on the orders of the authorities below. Apart from the fact that the assessee has filed a suit for recovery of the amount supported by the necessary affidavits indicating his ownership over the amount the accounts also indicate that the assessee has regarded this amount as owing to him. 12. Simply as the facts of this appeal are so ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hough the conveyance deed was signed by adult members of the family, the assessee-family had treated the amount and the Farm as belonging to it. In the counter filed by Harinagar Sugar Mills Ltd., reference is made to the order of the Central Government dt. 1st Sept., 1955, wherein in exercise of the powers conferred upon it by s.138(4) of the Companies Act, 1913, the Government appointed one Manek Mistry, Chartered Accountant, as Inspector to investigate the affairs of the company from the date of its incorporation and with particular reference to the Cane Farm standing as an asset in its balance-sheet. The report of the Investigator indicated that "the said farms were purchased, developed and run out of the funds belonging to these defend ..... X X X X Extracts X X X X X X X X Extracts X X X X
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