COMMISSIONER OF WEALTH TAX Vs. DOMINIC JOSEPH

JUDGEMENT

(1.) The Commissioner of Wealth Tax is before us.

(2.) The question referred to us for our opinion reads:-

(3.) This Rules prescribes the procedure, the assessing authority shall follow while determining the market value of an unquoted equity share of any company other than an investment company or a managing agency company. To determine the market value of the unquoted equity share the assessing authority shall first deduct all the "liabilities as shown in the balance sheet from the value of all its assets, again as shown in the balance sheet. In view of Explanation II(1)(a) (hereinafter mentioned as clause 'a'), the assessing authority however, shall not treat the amount paid as advance tax under S.18A of The Indian Income Tax Act, 1922 (11 of 1922) or under S.210 of The Income tax Act, 1961 (43 of 1961) as asset although the same is shown as asset in the balance sheet Similarly the amount representing provision for taxation (other than the amount referred to in clause (1)(a) to the extent of the excess over the tax payable with reference to the book profits in accordance with the law applicable thereto, the assessing authority shall not treat as liability notwithstanding the fact, the same is shown as liability in the balance sheet. The net amount so arrived at shall be divided by the total amount of its paid-up equity share capital as shown in the balance sheet. Eighty five percent of the brake up value so determined is the market value of each unquoted equity share.