1999 PLP 942 (PTD)
COMMISSIONER OF WEALTH TAX Versus L.G. RAMAMURTHY
| Citation | 1999 PLP 942 (PTD) |
| Forum / Court | 232 I T R 677 |
| Bench Members | K.A. Thanihkachalam and N. V. Balasubramanian, JJ |
| Parties | COMMISSIONER OF WEALTH TAX Versus L.G. RAMAMURTHY |
| Primary Law | Wealth tax |
Q1: What are the key laws and sections cited in 1999 PLP 942 (PTD)?
This judgment primarily cites: Wealth tax as referenced in Pakistani case law index.
Q2: Which judicial bench decided the case 1999 PLP 942 (PTD)?
The case was heard and decided by the 232 I T R 677 bench comprising: K.A. Thanihkachalam and N. V. Balasubramanian, JJ.
Q3: What is the official citation format for this judgment on Pakistan Law Portal?
Cite this legal precedent as: 1999 PLP 942 (PTD) (COMMISSIONER OF WEALTH TAX Versus L.G. RAMAMURTHY). Read the full summary and cross-referenced laws free on Pakistan Law Portal.
Laws Cited
Headnotes / Summary
Valuation of unquoted equity shares
Provision for taxation should not be reduced by advance tax paid
Indian Wealth Tax Act, 1957, S.7
Indian Wealth Tax Rules, 1957, R.1-D. Section 7(1) of the Wealth Tax Act, 1957, speaks of the market value of asset and not the net income or the net price received by the assessee. This is not a case where a fiction is created by Parliament. It is only a case of prescribing the basis of determination of market value. While valuing unquoted equity shares of a company under Rule 1-D of the Wealth Tax Rules, 1957, provision for taxation should not be reduced by the advance tax paid. Bharat Hari Singhania v. CWT (1994) 207 ITR 1 (SC) fol. C.V. Raj an for the Commissioner.' P.P.S. Janarthana Raja for the Assessee.
Judgment & Decree
K.A. THANIKKACHALAM, J.
At the instance of the Department, the Tribunal referred the following common question for the assessment years 1972-73 and 1973-74 under section 27(1) of the Wealth tax Act, 1957, for the opinion of this Court: "Whether the Appellate Tribunal is correct in law in holding that in the valuation of unquoted equity shares, for the purpose of determining the break up value, provision for taxation should not be reduced by the advance tax paid?" The point for consideration is, in the valuation of unquoted equity shares for the purpose of determining the break up value, whether provision for taxation should be reduced by the advance tax paid. A similar question came up for consideration before the Supreme Court in the case of Bharat Hari Singhania v. CWT (1994) 207 ITR 1 where in the Supreme Court held that while valuing the unquoted equity shares of a company under Rule 1-D, no deduction on account of capital gains tax which would have been payable in case the shares were sold on the valuation date can be made. There is no sale of the asset and there is no question of capital gains tax being attracted or being paid. Section 7(1) speaks of the market value of the asset and not the net income or the net price received by the assessee. This is not a case where a fiction is created by Parliament. It is only a case of prescribing the basis of determination of market value. On the same reasoning, no other amounts like provision of taxation, provident fund and gratuity etc. can be deducted. Rule 1-D is exhaustive on the subject. In view of the abovesaid judgment of the Supreme Court, we answer the question referred to us in the negative and in favour of the Department. No costs. M.B.T./1876/FC Order accordingly.