TMI Blog1998 (4) TMI 98X X X X Extracts X X X X X X X X Extracts X X X X ..... 1961, and shown on the assets side of the balance-sheet of the said companies cannot be deducted from the tax payable, in determining whether the provision for taxation is in excess over the tax payable with reference to the book profit in accordance with the law applicable hereto, within the meaning of clause (ii)(e) of Explanation II to rule 1D of the Wealth-tax Rules, 1957 ?" The relevant assessment year is 1983-84. The assessee had claimed that the unquoted shares of the private limited company be valued as per the provisions of rule ID of the Wealth-tax Rules and while doing so, advance tax paid and shown on the assets side of the balance-sheet cannot be deducted from the provision made for tax payable. The Wealth-tax Officer reject ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... around the treatment to be given to the advance tax paid shown on the assets side of the balance-sheet of the company while working out the value of the equity shares on the break-up value method. At the time of making of the reference, this question was pending before the apex court. Now, we have the benefit of the decision of the apex court in Bharat Hari Singhania v. CWT [1994] 207 ITR 1. The Supreme Court while construing the provisions of ID of the Wealth-tax Rules, 1957, held that the said rule was required to be followed in every case where unquoted equity shares of a company (other than an investment company or a managing agency company) have to be valued and that all the authorities under the Act including the Valuation Officer wer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... njab and Haryana High Courts and differed from the view taken by the Gujarat High Court in CWT v. Ashok K Parikh [1981] 129 ITR 46. In view of the decision of the Supreme Court in the case of Bharat Hari Singhania v. CWT [1994] 207 ITR 1 we hold that the Tribunal was in error in directing the Wealth-tax Officer to value the unquoted shares of the private companies by holding that the advance tax paid under the Income-tax Act, 1961, and shown on the assets side of the balance-sheet of the said company cannot be deducted from the tax payable in determining whether the provision for taxation is in excess over the tax payable with reference to the book profit. The question referred to this court is, therefore, answered in the negative, in fav ..... X X X X Extracts X X X X X X X X Extracts X X X X
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