SHRI RAMKRISHNA BAJAJ Vs. THE COMMISSIONER OOF WEALTH

JUDGEMENT

(1.) This reference under the Wealth -tax Act, 1957 is arising out of total eight reference applications moved by different assessees after adjudication of their grievances by the Income Tax Appellate Tribunal, Nagpur Bench (hereinafter referred to as 'the ITAT' for short) in eight wealth tax appeals. The assessment year with which we are concerned is 1981 -82. The questions referred are identical in all matters and, therefore, only one/common reference has been made, which governs the eight wealth tax matters.

(2.) The questions referred to by the ITAT vide its order dated 18 th June, 1990, are as under :

(3.) However, during arguments, Shri Thakkar, learned Advocate appearing for the respective assessees has submitted that answer to question No.1 is sufficient to decide the entire controversy. He further stated that method of valuation of interest of partners in the firms on the basis of value of shares as quoted in market as on 31/03/1981 or validity of its use, is not in dispute and, hence, the only issue to be gone into is - Whether on 31/03/1981, when previous year of respective firms had not ended and was scheduled to end on 30/06/1981, interest of partners in such firms could have been subjected to valuation in terms of Section 7(1) of the Wealth -tax Act read with Rule 2 of the Wealth -tax Rules ? Answer to this issue answers first two questions mentioned supra. We are mentioning this at the threshold, because in compilation handed over by Advocate Shri Thakkar for the applicants for consideration, if written submissions are seen, at Step -1, the challenge to correctness of valuation procedure also appears to have been raised. However, the learned Advocate has not argued it and has submitted that as profit does not accrue on day to day W.T.R. No.52/1990 4//15 Judgment basis, and it is only at the end of previous year of firms i.e. on 30/06/1981, overall view of business of the firms could have been taken and then interest of partners therein could have been worked out, the exercise undertaken on these lines on 31/03/1981 is not legal. He has added that when computation provision cannot be applied in present facts, the charging section also does not apply.