COMMISSIONER OF WEALTH TAX Vs. M P BIRLA

JUDGEMENT

(1.) IN this reference under s. 27(3) of the WT Act, 1957 for the asst. yrs. 1981-82, 1982-83 and 1983- 84 the following questions of law have been referred to this Court :

(2.) IT is not in dispute that the second question is concluded by the decision of this Court in the case of L.N. Birla vs. CWT reported in (1987) 59 CTR (Cal) 23 : (1987) 168 ITR 86 (Cal). Following the said decision we answer the second question in the affirmative and in favour of the assessee.

(3.) THE assessee appealed to the AAC for the first two assessment years before whom it was submitted that the registered valuer had valued the shares keeping in view that principles laid down by the Hon'ble Supreme Court in the cases of CWT vs. Mahadev Jalan & Ors. 1972 CTR (SC) 395 : (1972) 86 ITR 621 (SC) and CWT vs. Smt. Kusumben D. Mahadevia (1980) 14 CTR (SC) 366 : (1980) 122 ITR 38 (SC). It was further submitted that as the aforesaid company is an investment company where profits fluctuated very widely, the WTO should take into consideration the profits for three years instead of five years. The assessee also objected to the disallowance of donation for the accounting year 1980. Another objection raised on behalf of the assessee was that the WTO had not made any allowance for lack of negotiability and retention of reserve. It was further contended that the WTO capitalised the value by taking the yield at 10% though an investor would except an yield of not less than 15%. The AAC in his order for the first two assessment years mentioned that the WTO had not given any reason for not accepting the valuation report of the registered valuer. The AAC was of the view that the capitalisation by taking the yield at 10% was low. The WTO was directed to accept the valuation report of the registered valuer.