Law:

Section:

Rule 1D, read with Explanation II(ii)(e) of the Wealth-Tax Rules 1957 - Valuation of assets - Assessment year 1973-74 - Whether in valuing assets held by assessee in certain company, amount representing advance income-tax paid by company had to be deducted from provision for taxation on proper interpretation of rule 1D read with Explanation II(ii)(e) - Held, yes Section 5(1), read with section 5(1A) of the Wealth-Tax Rules 1957 - Exemption - Assessment year 1973-74 - Assessment year 1973-74 - Whether value of National Defence Certificate held by assessee was not exempt under section 5(10) read with section 5(1A) for assessment year in question - Held, yes FACTS The question came up for consideration was whether in valuing the assets held by the assessee in certain company, the amount representing the advance income-tax paid by the company should not be deducted from the amount representing the provision for taxation, on a proper interpretation of rule ID of the Wealth-tax Rules, read with the Explanation II (ii )(e) of the Wealth-tax Rules. Another question was whether on the facts and in the circumstances of the case, the value of the National Defence Certificates for Rs. 70,000 held by the assessee was exempt under section 5(1) read with section 5 (1A). HELD In view of the decision of this court in CWT v. N. Krishnan [1986] 162 ITR 309 (Kar.) in valuing assets held by assessee in a certain company, the amount of advance income-tax paid by the company should be deducted from the provision for taxation, on a proper interpretation of rule ID read with the Explanation II(ii )(e) of 1957 Rules. With regard to the question of exemption of National Defence Certificates held by the assessee, in view of decision in K.S. Ayodhyanath v. CWT [1983] 141 ITR 309 (Kar.), it was to be held that same were not exempt under section 5(1) read with section 5(1A). Note: The reference was decided in favour of the revenue. CASE REVIEW CWT v. Krishnan (N.) [1986] 162 ITR 309 (Kar.), Ayoodhyanath (K.S.) v. CWT [1983] 141 ITR 309 (Kar.)…

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