COMMISSIONER OF WEALTH TAX Vs. RATNA BOSE

JUDGEMENT

(1.) In this reference under Section 27(1) of the Wealth-tax Act, 1957, for the assessment years 1980-81 and 1981-82, the following question of law has been referred to this court :

(2.) The facts relating to this reference are that the assessee acquired shares of M/s. Bengal Water Proof Works (1940) Ltd., the value of which was declared in the return at face value. The above company was not listed in any stock exchange and was not an investment company. The Wealth-tax Officer, therefore, held that Rules 1C and 1D of the Wealth-tax Rules were applicable in the matter of determination of the value of these shares and completed the assessment taking the value of the assessee's ordinary, deferred and preference shares in the above company under the provision of the said rules. The Wealth-tax Officer, while doing so, mentioned in his order that the decision of the Supreme Court in the case of CWT v. Mahadeo Jalan which pertained to the assessment years 1957-58 and 1958-59 was given at a time when Rule 1C was not an issue.

(3.) On appeal, the Commissioner of Income-tax (Appeals) observed that although the Calcutta Bench of the Tribunal has held in a recent judgment that Rule 1D was directory, the Kerala High Court in CWT v. Mamman Varghese [1983] 139 ITR 351 and the Allahabad High Court in CWT v. Sripat Singhania are in favour of treating the rule as mandatory. The Commissioner of Income-tax (Appeals ) as such confirmed the action of the Wealth-tax Officer.