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TMI Blog1998 (2) TMI 150X X X X Extracts X X X X X X X X Extracts X X X X ..... than a year at a time. The assessee pleaded before WTO that the decision of the Tribunal (Amritsar Bench) was applicable as also Circular No. 478 of CBDT. 3. On first appeal, ld. counsel pleaded that the WTO should have charged interest year after year and should have issued demand notice for each year. He further submitted that since the WTO had not done so, no interest could be charged. He filed an application under section 35 to cancel the demand of interest created by the WTO. He referred to the provisions of Explanation 1 to section 32 and submitted that the WTO should have charged interest keeping in view the provisions of section 220(2) read with rule 118 of the Income-tax Rules, 1962. He emphasised that the provisions of Explanati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ovisions of section 31(2) of WT Act were identical with the provisions of section 220(2) of the IT Act. He pointed out that for calculating interest under section 220(2), rule 118 was enacted in Income-tax Rules, 1962. Rule 118 is reproduced hereunder, for the sake of convenience: - "118. (1) Subject to the provision of rule 119 and sub-rule (2) of this rule, the Assessing Officer shall calculate the interest payable under sub-section (2) of section 220 at the end of each financial year if the amount of tax, penalty or other sum in respect of which such interest is payable has not been paid in full before the end of any such financial year and a notice of demand under section 156 shall be issued accordingly." He pleaded that the provisi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s though not shown in the balance-sheet of the companies concerned. On first appeal, the Appellate Controller relying on the strength of the decision of Hon'ble Mysore High Court in CED v. J. Krishna Murthy [1974] 96 ITR 87, held that the Assistant Controller could not add the value of the goodwill of the companies concerned to their respective assets to determine the value of each of the shares on break-up value method. He also held that rule 1D constitutes a sound basis for the valuation of unquoted shares in estate duty proceedings. This was upheld by Hon'ble High Court. Ld. counsel next referred to the decision of Hon'ble Madras High Court in the case of CGT v. Sundaram Industries Ltd. [1996] 222 ITR 710, wherein it was held that "what ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... charging section." Ld. counsel next referred to page 1 of the paper book, where a request was made to the WTO on 5-7-1982 for adjustment of income-tax refund against wealth-tax demand for assessment year 1982-83. He also referred to page 3, where a copy of letter dated 22-3-1986 is placed requesting the IAC for adjustment of income-tax refund. It is mentioned that a refund of Rs. 2,836 had been adjusted against various demands and a refund of Rs. 4,312 was allowed as per refund voucher dated 6-3-1986. In the said letter, the assessee had opposed the adjustment made by overlooking letter dated 5-7-1982 seeking adjustment of refund against wealth-tax demand for assessment year 1982-83. It is also mentioned to the IAC that entries may be re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lied on orders of the departmental authorities. He submitted that the provisions of section 32 of WT Act only apply the provisions of sections 221 to 227 of IT Act for the purpose of recovery of wealth-tax and the provision of rule 118 cannot be invoked, as argued by ld. counsel. He also submitted that the case law relied upon by ld. counsel was not applicable. 6. We have carefully considered the submissions made by both the parties and have also perused the orders of the departmental authorities. It is observed that the provisions of section 31(2) of W.T. Act and section 220(2) of IT Act are identical. It is also observed that the said provisions were amended by the Direct Tax Laws (Amendment) Act, 1987 w.e.f. 1-4-1989 so as to provide t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ced hereunder, for the sake of convenience: - "Further, sub-clause (b) seeks to add another proviso to the section to provide that where the duration of default includes both the period prior to the 1st of April, 1989, and also period subsequent to that date, the calculation of interest for the earlier period will be on the basis of the old provisions and the calculation of interest for the subsequent period will be controlled by the new provisions." In the background of the earlier provision, whereunder interest was chargeable at the rate of fifteen per cent per annum from the day commencing after the end of the period mentioned in sub-section (1) of section 31, when no terminal for charging interest was provided as has been provided a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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