RADHADEVI MOHATTA SMT Vs. COMMISSIONER OF WEALTH TAX

JUDGEMENT

(1.) THE question which has been referred to this Court under S. 27(1) of the WT Act, 1957 (hereinafter referred to as "the Act") at the instance of the assessee is as follows :

(2.) IN the course of assessment to wealth tax the shares and debentures owned by the assessee were valued by the assessee herself at Rs. 10,19,527. That value was accepted by the WTO. However, it was the claim of the assessee before the WTO that the value of the shares was the market value which was more than the cost price of the shares and, therefore, since the market value was the notional wealth, a notional tax liability in the form of capital gains tax should be taken into account while valuing the net wealth of the assessee. The assessee's case was that on the basis of the market value of the shares and debentures, the capital gains tax liability would be about Rs. 80,200 and that this amount must be deducted while computing the net wealth of the assessee. Needless to say that this contention was rejected by the WTO as also by the AAC before whom it was raised in the appeal filed against the order of the WTO.

(3.) SHRI H. G. Advani, appearing on behalf of the assessee, has fairly brought to our notice two decisions which are against him, but according to the learned counsel, the claim which is made by the assessee for the reduction of a notional capital gains tax can be well supported by the recent decision of the Supreme Court in CWT vs. P. N. Sikand 1977 CTR (SC) 253 : (1977) 107 ITR 922 (SC), and it is on the basis of this decision as well as the decision of the Delhi High Court from which the appeal was taken to the Supreme Court and which is P. N. Sikand vs. CWT (1974) 96 ITR 424 (Del), that an elaborate argument was advanced by the learned counsel for the assessee which requires some consideration.