COMMISSIONER OF WEALTH TAX Vs. GAURISHANKAR AGARWAL

JUDGEMENT

(1.) : This is a reference under S. 27(1) of the WT Act, 1957 ('the Act'). The following question has been referred at the instance of the Department:--

(2.) THE matter relates to two different assessees, the former having the status of HUF and the latter that of individual, belonging to the same Agarwalla Group, and having the valuation date of 31st March. THEy were assessed under S. 16(3) of the Act. THE assessees held 1,000 fully paid equity shares in Steels worth Ltd. Company. THEse shares were not the subject of dealing in recognised stock exchanges. THEy were also not shares in investment companies or in any managing agency. THEse were called unquoted equity shares. While valuing the said shares in the assessment, the WTO as per his calculation in the Annexure to his order, for deducted the income-tax advance from the total assets of the company, besides the liabilities such as secured loan, trade credits, profit sharing scheme amounts, as the case may be, unsecured loans, gratuity provisions and income-tax provision made. THE income tax provision was restricted to tax on book profits where from the advance-tax paid and deducted already from total assets was again deducted, and, accordingly, the assessment was complete. Being aggrieved, the assessee preferred an appeal before the AAC contending, inter alia, that the WTO erred in the assessment of valuation of the said shares as while he had deducted the income-tax advance from the total assets of the company, he had again deducted the income-tax advance in computing the liabilities so that in computing the break-up value of each share the liability was reduced by the WTO resulting in the increase of the value of each share.

(3.) IT is submitted that this case is squarely covered by the decision in CWT vs. Ram Gopal Mahesh Kumar (HUF) and Ram Gopal Krishna Kumar Saharia (HUF) (1993) 1 GLR 392. Following the said decision, we answer the question in the negative and in favour of the Revenue and against the assessees.