COMMISSIONER OF WEALTH TAX Vs. NIRAJKUMAR BAJAJ HUF

JUDGEMENT

(1.) THESE are applications under S. 27(3) of the WT Act, 1957 ("the W. T. Act"), filed by the CIT, Vidarbha, Nagpur, requiring the Tribunal to refer to this Court the following two questions, said to be of law :

(2.) THE Central Board of Revenue has issued a Circular No. 3(WT) of 1957, dt. 28th Sept., 1957, reading as under :

(3.) SUCH a situation arises also in the Expln. II to r. 1D which deals with valuation of unquoted equity shares of certain companies. Sub cl. (i)(a) of the said Expln. II is similar to sub cl. (a) of r. 2D and cl. (ii)(e) of the Expln. II is similar to cl. (b) of r. 2E. Indeed, the language employed in Expln. II(ii) (e) to r. 1D is somewhat clumsy and not as clear as the language employed in r. 2E(b) and yet several High Courts including this Court have held that the terminology "tax payable with reference to the book profits in accordance with the law applicable thereto" used in sub cl. (e) of cl. (ii) of Expln. II to r. 1D means the gross tax payable in entirety without deducting the advance tax shown on the assets side of the balance sheet. The Tribunal has held that the ratio of the above decisions applies with equal force, if not more, to cl. (b) of r. 2E also. It has noticed the controversy prevailing in different High Courts on that issue, but has held that it was bound by the decision of the jurisdictional Court.