9911796707
TMI Blog1987 (1) TMI 124X X X X Extracts X X X X X X X X Extracts X X X X ..... me-Tax Office on 29-3-1979, which reads as follows : " This is to state that I am holding 6,049 Equity Shares of Bajaj Auto Ltd. as Capital Investment but as of today I declare that I have converted the 3,000 Equity Shares of Bajaj Auto Ltd. into my stock-in-trade and accordingly from today I am holding the said 3,000 Equity Shares of Bajaj Auto Ltd. as my stock-in-trade and not as a Capital Investment. I may also inform you that I propose to join others as a partner in the business of inter alia dealing in shares and propose to contribute 3,000 Equity Shares. Stock-in-Trade as my Capital contribution in the partnership firm proposed to be styled as Bajaj Trading Company. May I request you to kindly take note of this letter and keep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppeals) held that till the formation of the partnership firm, i.e. Bajaj Trading Co., in which the assessee became a partner on 8-5-1979, no business was carried on by the assessee and, therefore, on 31-3-1979 there was no business in existence. He, therefore, held that the valuation of these 3,000 shares at the market rate on the valuation date, i.e. 31-3-1979 as made by the Wealth-tax Officer was perfectly justified and did not call for any interference. The assessee was aggrieved and has, therefore, come up with the first point of dispute in the present appeal before us. 3. The assessee's learned counsel, Shri Mehta, submitted to US that it was open to the assessee at any time to commence the business of dealing in shares and the comme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... business in existence the question of any stock-in-trade of the business or the question of conversion of shares held as capital investment into stock-in-trade of the business simply did not arise. Shri Vohra pointed out that even the investment of these 3,000 shares as initial capital in the firm, Bajaj Trading Company, was on 8-5-1979, i.e. subsequent to the valuation date. Our attention was invited to paragraph 4 of the order of the Commissioner of Wealth-tax (Appeals) and Shri Vohra vehemently argued before us that the intention to commence business was not the same thing as actual commencement of the business. Shri Vohra then referred to section 7 of the Wealth-tax Act, 1957 where sub-section (1) provided for the value of an asset othe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en no business was carried on by the assessee on the relevant valuation date, i.e. 31-3-1979 neither clause (a) nor clause (b) of sub-section (2) of section 7 or rules 2A, 2B, 2C, 2D, etc. under sub-section (2) of section 7 of the Wealth-tax Act, 1957 will be applicable. In these circumstances, the Balance Sheet prepare by the assessee as on 31-3-1979 was a mere list of the assets and liabilities and their value on the valuation date and nothing more. The mere declaration of some shares being held as capital investments being converted into stock-in-trade means nothing when no business was in existence already or was commenced by the assessee and was in existence during the previous year relevant to this assessment year. Considering all thi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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