2000 (7) TMI 30

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.... in holding that the provisions of rule 1D of the Wealth-tax Rules, 1957, were mandatory and the valuation of unquoted shares should be made in accordance with that rule and not on yield basis as contended by the assessee ? (ii) Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was justified in law in holding that the debt amounting to Rs. 1,33,327 was not deductible from net wealth in accordance with the provisions of section 2(m)(ii) of the Wealth-tax Act, 1957 ?" Brief reference to the factual aspects would suffice. For the assessment year 1977-78, the assessee had, while filing its return of wealth, declared the value of unquoted shares in two companies at their face value. Subsequently, a revis....

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....f which was not chargeable to wealth-tax under the provisions of section 5, had rightly not been deducted from the net wealth. At the instance of the assessee, as indicated, the above references have been made. There is no appearance on behalf of the petitioner in spite of service. Learned counsel for the Revenue submitted that the Tribunal was justified in its conclusion on both the questions. So far as the first question is concerned, the matter is squarely covered by the decision of the apex court in the case of Bharat Hari Singhania v. CWT [1994] 207 ITR 1. It was, inter alia, observed by the apex court as follows : "In view of our opinion that the Valuation Officer is also bound by the rules under the Act, the question of any ....

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....n assessee holding shares in a company whose assets comprise wholly or partly of agricultural land, is not entitled to exclude such shares from his wealth." The first conclusion by the apex court quoted above puts the matter beyond a shadow of doubt that rule 1D has to be followed in every case and, therefore, the question of the rule being mandatory or directory does not arise. Our answer to the first question therefore is that rule 1D was to be followed by the Assessing Officer and in that context the further question whether it is mandatory or directory really loses its significance. The Tribunal was justified in its conclusion that the Assessing Officer was bound to follow the rules. So far as the second point relating to the appl....