Law:

Section:

Section 7 of the Wealth-tax Act, 1957, read with Explanation II to rule 1D of the Wealth-tax Rules, 1957 - Valuation of assets - Shares - Whether value of unquoted equity shares is to be determined as per provisions of rule 1D - Held, yes - Whether if dividend on preference shares has not been declared in a general body meeting of company before valuation date and amount has not been set apart towards depreciation in balance sheet, such amounts would not be allowed as deduction while valuing unquoted equity shares - Held, yes HELD The value of unquoted equity shares is to be determined as per the provisions of rule 1D. So far as the deduction towards liabilities is concerned, such liabilities which have been excluded under the aforementioned rule cannot be allowed. [Para 5] From a reading of clause (ii ) of Explanation II of rule ID, it is absolutely clear that if the amount of dividend on preference shares has not been declared before the valuation date at a general body meeting of the company, the same cannot be allowed as deduction towards liability. Likewise, if the amount has not been set apart towards depreciation in the balance sheet, the amount of such depreciation also cannot be allowed as deduction while valuing the unquoted equity shares under rule 1D. [Para 6] CASES REFERRED TO Jiwan Lal Virmani v. CWT [1967] 66 ITR 338 (All.) [Para 2], Bharat Hari Singhania v. CWT [1994] 207 ITR 1/ 73 Taxman 3 (SC) [Para 4] and CWT v. Sita Ram Jindal [2001] 248 ITR 111 (SC) [Para 7]. A.N. Mahajan for the Applicant. JUDGMENT 1. The Tribunal, Allahabad, has referred the following two questions of law for opinion of this Court under section 27(1) of the WT Act, hereinafter referred to as the Act : "1. Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the assessee was entitled to file an appeal under the WT Act, 1957, even though he had agreed to be assessed on the value of the unquoted equity shares worked out in accordance with rule 1D of the WT Rules, 1957 ? 2. Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that arrears of dividends on cumulative preference…

Deprecated: trim(): Passing null to parameter #1 ($string) of type string is deprecated in /home/digixyei/sldsystempk.com/view/master-layout/view_case.php on line 492