COMMISSIONER OF WEALTH TAX Vs. K M DESIKAR

JUDGEMENT

(1.) THE assessee in this case filed wealth-tax returns for the assessment years 1959-60 and 1960-61 admitting a net wealth of Rs. 14,65,569 and Rs. 15,72,944, respectively. THE Wealth-tax Officer determined the net wealth for the first year at Rs. 14,91,678 and for the second year at Rs. 15,77,003. THE net wealth of the assessee in those two years included the value of certain shares held by the assessee. THE assessee had valued the shares on the basis of their book value on December 29, 1959, and October 19, 1960, respectively. THE value of the shares as furnished by the assessee had been originally accepted by the Wealth-tax Officer.

(2.) LATER, the Wealth-tax Officer, in the proceedings for assessment for the year 1961-62 did not accept the value of the shares returned by the assessee on the basis of their book value, but adopted the actual market value as the basis of valuation. The result was while the net wealth furnished by the assessee for that year based on the book value of the shares was Rs. 15,57,068, the net wealth as determined by the Wealth-tax Officer on the basis of the market value of the shares came to Rs. 20,33,117. At that stage, the Wealth-tax Officer took the view that the valuation of the shares in the earlier assessment years 1959-60 and 1960-61 was not correct, and in that view, he reopened the original assessments for the said two years under Section 17(1)(b) of the Wealth-tax Act. The assessee submitted a return in answer to the notice issued under Section 17(1)(b) and furnished details of the market value of the shares on the relevant dates in respect of both the assessment years. Based on the said market value furnished by the assessee, the Wealth-tax Officer determined the wealth of the assessee for these two years as under : <FRM>JUDGEMENT_101_ITR92_1973Html1.htm</FRM>