COMMISSIONER OF INCOME TAX Vs. RAJENDRA K PARIKH

JUDGEMENT

(1.) AT the instance of the Revenue, the following question of law is referred to us by the Tribunal :

(2.) OUR attention is drawn by the learned standing counsel appearing for the Revenue that the issue involved in the present reference is similar to the issue involved in the case of CWT vs. Ashok K. Parikh (1981) 129 ITR 46 (Guj) : TC 63R.439. In the said case, the issue before the Court was that for the purpose of computation of the market value of the shares of M/s Mehta Parikh & Co. (P) Ltd., the advance tax paid under S. 210 of the IT Act, 1961, and shown on the assets side of the balance sheet of the said company, whether it can be deducted from the tax payable, in determining whether the provision for taxation is in excess over the tax payable with reference to the book profits in accordance with the law applicable thereto within the meaning of cl. (ii)(e) of Expln. II to r. 1D of the WT Rules, 1957. After discussing the relevant provisions of r. 1D and also the case law on the subject, this Court has held as under :

(3.) FROM the above decision, we are of the view that the question referred to us is required to be answered in view of observations made by the Hon'ble Supreme Court in the case of Bharat Hari Singhania (supra). We, therefore, hold that the Tribunal is right in confirming the view taken by the CIT(A) in directing the value of the shares to be computed under r. 1D of the WT Rules, 1957, as interpreted by the Supreme Court in the case of Bharat Hari Singhania (supra). We answer the question in affirmative, i.e., in favour of the assessee and against the Revenue.