TaxTMI 
TaxTMI 
1982 (7) TMI 120
X X X X Extracts X X X X
X X X X Extracts X X X X
....eing 75 per cent of the Break up value, Rounding it off the assessee valued the assets at Rs. 5. The WTO revalued these assets In so doing he did not accept the assessee's contention that a sum of Rs. 83,51,205 deposits from shareholders was refundable to them The WTO worked out the break up value at Rs. 47,52 and having regard to the non declaration of dividends for six years fixed the market value of the shares at Rs.356.40 The assessee who is the owner of 270 shares in this company had calculated the excess of assets over expenditure in respect of these assets at Rs. 99,070 The value of the shares themselves was returned at Rs. 1,350. Valuing these shares at Rs. 356,04, the WTO worked out the market value of these shares at Rs. 94,878 th....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... is pointed out that though originally the sum of Rs. 1,31500 was treated as on refundable deposit by an appropriate resolution passed by the company this view was revised and the amount was treated as a refundable deposit The valuation by the break-up method of the shares given by the assessee should therefore, be accepted The assessee has no objection to including the sum of Rs. 1,31,500 as extra amount due to the assessee from the company 3. For the Department stress is laid on the orders of the authorities below. 4. The assessee had been taking according to the ld. Counsel for the Department an inconsistent stand that his amount was non refundable in the first instance and refundable subsequently. This was a purely private limited c....
X X X X Extracts X X X X
X X X X Extracts X X X X
....eak up method he treated the deposit as non refundable thus enhancing the assets of the company and increasing the value of the shares, Coming back to the assessment of the individual he treated these deposits as refundable and included them in the net wealth Certainly such an inconsistent view cannot be up held, But a more basic problem in this computation of net wealth is that in our view neither the resort to r. 1D nor the approach of both parties to the deposit amount seems to be correct. Rule 1D is not applicable to an investment company It is admitted before us that the assessee, a one time builder of a specific number of flats for its shareholders, has done no business but has only made an investment Admittedly r. 1-D cannot be resor....
X X X X Extracts X X X X
X X X X Extracts X X X X
....wrongly sticking on to r. 1-D in a case where it may not apply obviously these flat holders, are seeking to maintain the prices of their flats at the nominal value of the shares of the company whereas their market value may be fairly higher than this. This will be against the valuation provisions of the WT Act While thus on the one hand the double consideration of the deposit may show an inconsistency, we have to hold that the very basis of valuation adopted both by the assessee and the Department cannot be accepted as correct. 6. It was argued before us that when there is no dispute about the method of valuation or the applicability of r. 1-D between the parties the Tribunal should not refer to these matters or widen the issue The proble....