Wealth-tax share valuation: advance tax already paid cannot be duplicated as a liability in the balance-sheet provision.

For wealth-tax valuation of shares, a provision for taxation in the balance-sheet cannot be treated as a liability to the extent it already includes advance tax paid; only the unpaid balance remaining on the valuation date may be deducted as a liability. Advance tax already paid cannot be counted twice in the liabilities column for share valuation, so the issue was answered against the assessee and in favour of the Revenue.

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Issues: Whether, in valuing shares for wealth-tax purposes, the provision for taxation shown in the company's balance-sheet could be treated as a liability without deducting the advance tax already paid.

Analysis: The question referred stood covered by the Supreme Court's ruling that, where advance tax already paid is included in the amount set apart as provision for taxation, that amount cannot again be treated as a liability. The relevant valuation principle is that only the amount still remaining payable on the valuation date is to be regarded as a liability, and the amount of tax already paid cannot be duplicated in the liabilities column for share valuation.

Conclusion: The issue was answered in the negative, against the assessee and in favour of the Revenue.

Ratio Decidendi: For wealth-tax valuation of shares, advance tax already paid cannot be counted again as a liability when it is included in the provision for taxation shown in the balance-sheet; only the unpaid balance may be treated as liability on the valuation date.

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