TaxTMI 
TaxTMI 
2006 (8) TMI 164
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....ment year 1971-72, while W.T.R. No. 121/94, relates to the Sales Tax Appeals No. 385, 386 and 387/Ahd/90 pertaining to the assessment years 1979-80, 1980-81 and 1981-82. In W.T.R. No. 112/95, the following question of law has been referred by the Income-tax Appellate Tribunal for the opinion of this court. "Whether the Appellate Tribunal has been right in law and on facts in holding that the rectification order by the Sales Tax Officer was not justified?" In W.T.R. No. 117/95, the following questions have been referred by the Tribunal for the opinion of this court. "1. Whether the Tribunal has been right in law and on facts in holding that the rectification order by the Wealth-tax Officer was not justified? 2. Whether the Tri....
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.... his jurisdiction under section 35 of the Wealth-tax Act and consequently issued notice to the assessee. The assessee appeared before the Wealth-tax Officer and raised many objections including the objection that the Wealth-tax Officer was not bound to adopt the valuation procedure laid down under section 7(2) (a) as he had a discretion to go for valuation procedure provided under section 7(1) of the Wealth-tax Act. The argument did not find favour with the Wealth-tax Officer and he accordingly rectified the order and in accordance with the mandatory language employed in rule 2B(2) of the Rules observed that if there was a difference of more than 20 per cent. in the book value and the market value of the shares, then, the market value preva....
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....ear 1968. It accordingly allowed the appeal and held that the order under section 35 of the Wealth-tax Act could not be passed. The Revenue, being aggrieved by the said judgment and the other judgments, wherein the first judgment was followed for granting appeal in favour of the assessee, made separate reference applications, the Tribunal has accordingly made the abovereferred references. Mr. M.R. Bhatt, learned counsel for the Revenue submits that the approach of the learned Tribunal in applying the judgment of Kikabhai Bhagubhai [1969] 72 ITR 586 (Guj) to the facts of the present case was not only illegal but was in perverse exercise of jurisdiction. He submits that the judgment would be an authority in relation to sections 7(1) and 7(....
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....965 and 1989. Prior to its omission, rule 2B read as under: "(1) The value of an asset disclosed in the balance-sheet shall be taken to be- (a) in the case of an asset on which depreciation is admissible, its written down value; (b) in the case of an asset on which no depreciation is admissible, its book value; (c) in the case of closing stock, its value adopted for the purposes of assessment under the Income-tax Act, 1961, for the previous year relevant to the corresponding assessment year. (2) Notwithstanding anything contained in sub-rule (1) where the market value of an asset exceeds its written down value or its book value or the value adopted for the purposes of assessment under the Income-tax Act, 1961, as the case may....
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....nt interpretation can be put to the word so employed by the Legislature. From the language of rule 2B, we are unable to hold that the word "shall" employed either under sub-rule (1) or sub-rule (2) can be read as "may". Undisputedly, the market value of the shares was exceeding by more than 20 per cent. of the book value of the share and if that was so, in accordance with rule 2B, the Wealth-tax Officer was obliged to consider the market value of the asset. The first action on the part of the Wealth-tax Officer, undisputedly, was in breach of rule 2B of the Rules and if this illegality came to the notice of the Wealth-tax Officer, then, such illegality could be corrected and the order could be rectified under section 35 of the Wealth-tax....
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....t of the business of the assessee making such adjustments in the valuation, as the circumstances of the case may require, he is not bound to adopt the valuation laid down under section 7(2)(a) in case he decides to go in for the valuation of each asset in that particular business under section 7(1) of the Act. The case was absolutely different and in any case, the date of the decision would not change the applicability or inapplicability of the law, which, during pendency of the proceedings carne into existence. The observations made by the Tribunal that though rule 2B(2) carne into being in the year 1965, but as the judgment of the Gujarat High Court is of September, 1968, the judgment, in the case of Kikabhai Bhagubhai [1969] 72 ITR 58....