Law:

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Section 25 of the Wealth-tax Act, 1957 - Revision by Commissioner - Assessment year 1977-78 - Commissioner on finding that valuation of shares made by WTO was lower than actual value, he initiated proceedings under section 25 against assessee - However, Tribunal held that as relevant assessment order was carried over in appeal and it had merged with appellate order of appellate authority, Commissioner had no jurisdiction to initiate proceedings under section 25 - Whether in view of amendment in section 25(2) by Finance Act, 1989 with effect from 1-6-1988, Commissioner had requisite jurisdiction to initiate proceedings under section 25 - Held, yes CASES REFERRED TO J.K. Synthetics Ltd. v. Addl. CIT [1976] 105 ITR 344 (All.) [Para 2] and CIT v. Shri Arbuda Mills Ltd. [1998] 231 ITR 50/ 98 Taxman 457 (SC) [Para 3]. A.N. Mahajan for the Applicant. R.S. Agrawal for the Respondent. JUDGMENT 1. The Income-tax Appellate Tribunal, Delhi has referred the following question of law under section 27(1) of the Wealth-tax Act, 1957 hereinafter referred to as 'the Act' for opinion to this Court:- "Whether on the facts and in the circumstances of the case, the Tribunal was correct in holding that the assessment order of the WTO dated 27-2-1982 stood wholly merged in the appellate order dated 27-5-1983 and that hence the CWT had no power to interfere under section 25(2) of the Wealth-tax Act, 1957 and on that reasoning in quashing the order of the CWT dated 24-2-1984 as not valid in law ?" 2. Reference relates to the assessment year 1977-78. While passing the assessment, the Wealth-tax Officer had valued the shares held by the respondent assessee in L.H. Sugar Factory Ltd., Pilibhit at Rs. 9.96 per share. It may be mentioned here that the shares of M/s. L.H. Sugar Factory Limited are not quoted in the stock exchange. The Commissioner of Wealth-tax, after examining the record was of the opinion that a sum of Rs. 50,96,955 being a provision for gratuity made by M/s. L.H. Sugar Factory Ltd., was also deducted out of the total value of the assets of the said company. He was of the opinion that this could not have been done and, therefore, valuation taken by the Assessing Officer was…

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