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TMI Blog1982 (7) TMI 118X X X X Extracts X X X X X X X X Extracts X X X X ..... n equity shares for six years and more, the market value was worked out at Rs. 6.50 being 75 per cent of the break-up value. Rounding it off, the assessee valued the assets at Rs. 5. The WTO revalued these assets. In so doing he did not accept the assessee's contention that a sum of Rs. 83,51,205 deposits from shareholders were refundable to them. The WTO worked out the break-up value at Rs. 475.20 and having regard to the non-declaration of dividends for six years fixed the market value of the shares at Rs. 356.40. The assessee, who is the owner of 270 shares in this company, had calculated the excess of assets over expenditure in respect of these assets at Rs. 99,070. The value of the shares themselves was returned at Rs. 1,350. Valuing t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Commercial Ltd. If the latter proposition was correct, according to the learned counsel, certainly the first proposition was incorrect and vice versa. It is pointed out that though originally the sum of Rs. 1,31,500 was treated as a non-refundable deposit by an appropriate resolution passed by the company, this view was revised and the amount was treated as a refundable deposit. The valuation by the break-up method of the shares given by the assessee should, therefore, be accepted. The assessee has no objection in including the sum of Rs. 1,31,500 as extra amount due to the assessee from the company. 3. For the department stress is laid on the orders of the authorities below. 4. The assessee has been taking, according to the learned co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or some time was also agreed upon by the parties. As validly contended by the learned counsel for the assessee, the WTO, however, adopted an inconsistent view with regard to the alleged deposits. While computing the value of the shares under the break-up method, he treated the deposit as non-refundable, thus, enhancing the assets of the company and increasing the value of the shares. Coming back to the assessment of the individual, he treated the deposits as refundable and included them in the net wealth. Certainly such an inconsistent view cannot be upheld. But a more basic problem in this computation of net wealth is that, in our view, neither the resort to rule 1D nor the approach of both the parties to the deposit amount seems to be cor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f money are being made refundable or non-refundable at the desire of the interested members. This group of members through the medium of the company whether by shareholding or by deposits got flats constructed and allotted to themselves and are in effect the owners of these flats. By wrongly sticking on to rule 1D in a case where it may not apply, obviously these flat-holders are seeking to maintain the prices of their flats at the nominal value of the shares of the company, whereas their market value may be far higher than this. This will be against the valuation provisions of the Act. While, thus, on the one hand, the double consideration of the deposit may show an inconsistency, we have to hold that the very basis of valuation adopted by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... It is also imperative that if enhancement is to be made, the Tribunal must give an opportunity to the assessee to present his case before passing orders. Since we are not sure that there will be a real enhancement in this case after the WTO has gone into the details. The stage for giving an enhancement notice, if any, has not, therefore, arrived. If the WTO finds that the value he has to adopt is in excess of the original figure of assessment, he must issue a proper notice to the assessee inviting his attention to the enhancement, hear his representations and then complete the assessment. The principle of natural justice, which requires a hearing before the enhancement would, in our opinion, be satisfied if the assessee has a bearing on thi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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