COMMISSIONER OF WEALTH TAX Vs. VARSHNEI S C

JUDGEMENT

(1.) A statement of the case has been submitted by the Income-tax Appellate Tribunal, "B" Bench, Patna, under Section 27(3) of the Wealth-tax Act, 1957 (hereinafter referred to as "the Act"), under the direction of this court, referring the following question of law for the opinion of this court:

(2.) THE relevant facts of the case can be found out from the statement of the case. THE assessment year involved is 1966-67, for which the valuation date is March 31, 1966 (wrongly stated in the assessment order annexure "A" as March 31, 1965). THE assessee is an individual and was holding certain shares in M/s. Seraikella Glass Works Private Limited. THE shares of the company were not quoted. THE assessee sold 10 shares to his wife, Smt. Padmini Devi, on August 6, 1965. THE shares were valued at the rate of Rs. 3,250 per share. THE Wealth-tax Officer found that these shares were valued at the rate of Rs. 8,739 in the assessment order for the assessment year 1965-66. He, therefore, came to the conclusion that the shares were not transferred for adequate consideration. He, therefore, valued the share at Rs. 8,666.58 per share and accordingly included the value of the shares in the net wealth of the assessee under Section 4(1)(a)(i) of the Act. THE order of the Wealth-tax Officer has been annexed and marked as annexure "A" forming part of the statement of the case.

(3.) MR. B.P. Rajgarhia has invited our attention to the order of the Income-tax Appellate Tribunal in W.T.A. No. 4 (Pat) of 1970-71 relating to the assessment year 1966-67, which clearly shows that the assessee was holding some shares of the Seraikella Glass Works Private Limited and that the shares of the company were not quoted. The assessee valued the shares at the rate of Rs. 3,250 per share. The Wealth-tax Officer found that the valuation made by the assessee was low and, accordingly, he took the valuation of the shares at Rs. 8,666.58, On appeal, the Appellate Assistant Commissioner allowed a little relief to the assessee and determined the value of the shares at Rs. 6,663. The Tribunal has also pointed out that the assessee came in appeal on similar addition before the Tribunal and the Tribunal, vide its rectification order in W.T. No. 117 of 1967-68, took the figure at Rs. 6,916 per share for the year 1965-66. The Tribunal has also pointed out that in the assessment year 1966-67, on the principle adopted by the Tribunal, the assessee calculated the value at Rs. 6,378 per share. The Tribunal, therefore, in the assessment year 1966-67, held that the valuation determined by the assessee at Rs, 6,378 is fair. The Tribunal also found that the Appellate Assistant Commissioner took the value at Rs. 6,678 against which the assessee has determined the value at Rs. 6,378 on the principle determined by the Tribunal. The Tribunal also held that there was not much difference between the figure taken by the Appellate Assistant Commissioner and that arrived at by the assessee. The Tribunal also held that as the value of the assessee is fair, the same is accepted and so the Wealth-tax Officer was directed to revalue the shares held by the assessee at the above figure.