Law:

Section:

Rule 2B of the Wealth-tax Rules, 1957, read with section 27, of the Wealth-tax Act, 1957 - Adjustment in value of an asset disclosed in balance-sheet - Dispute between parties was with regard to onus of proving market value of closing stock at an amount which resulted in attracting rule 2B(2) - Whether since question of onus of proof required construction of a statutory provision, it did raise a question of law - Held, yes Section 5(1)(xxxii), read with section 27, of the Wealth-tax Act, 1957 - Exemption - Industrial undertaking - Assessee claimed exemption under section 5(1)(xxxii) - Whether since question of exemption under section 5(1)(xxxii) requires construction of a statutory provision read along with Explanation to section 5(1)(xxxi), a question of law did arise in respect of claim made by assessee - Held, yes FACTS On instant application filed under section 27(3), the questions related to the applicability of rule 2B(2) of the Wealth-tax Rules, 1957, and the exemption claimed by the assessee under section 5(1)(xxxii). The Tribunal had declined to refer both these questions under section 27(1). Hence, the instant application was filed under section 27(3). HELD The question of applicability of rule 2B(2) arises where determination of the market value of the closing stock is at an amount exceeding by more than 20 per cent, the value disclosed in the balance-sheet. The dispute between the parties was with regard to the onus of proving the market value of the closing stock at an amount which resulted in attracting rule 2B(2). The question of onus of proof requires construction of a statutory provision and it does raise a question of law. Similarly, the question of exemption under section 5(1)(xxxii) requires construction of a statutory provision read along with the Explanation to section 5(1)(xxxi). Accordingly, a question of law aroses in this behalf as well. V.K. Singhal for the Applicant. N.M. Ranka for the Respondent. JUDGMENT This is an application under section 27(3) of the Wealth-tax Act, 1957, by the Commissioner of Wealth-tax for a direction to the Tribunal to state the case and refer certain questions of law said to arise out of the Tribunal's…

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