TMI Blog1994 (11) TMI 153X X X X Extracts X X X X X X X X Extracts X X X X ..... ethod) prescribed in r. 1D of the WT Rules determined the value of shares of the said company and added it to the returned wealth for each of the assessment year. Not being satisfied with the value worked out and adopted by the Assessing Officer as per r. 1D, the same was agitated before the Dy. CWT(A), Ahmedabad, who through his consolidated order dt. 21st Sept., 1990, directed the Assessing Officer to value the shares of the said company in accordance with the ratio laid down by the Hon'ble Supreme Court in the case of CWT vs. Kusumben D. Mahadevia reported in (1980) 14 CTR (SC) 366 : (1980) 122 ITR 38 (SC). The Assessing Officer was not satisfied with the decision and direction of the first appellate authority and came to this Tribunal by way of second appeal. This Tribunal examined the decision of the Hon'ble Supreme Court rendered in Kusumben's case and agreed with him. The Departmental appeal, therefore, came to be dismissed. 3. There were disputes in several cases in respect of the deduction of the advance tax payment and the provision for liabilities in terms of Expln. II, cl. (i)(a) and (ii)(e) to r. 1D of the WT Rules. One such dispute in the case of CWT vs. Ashok K. P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Supreme Court in Singhania's case is a very illuminating and landmark judgment on the interpretation and applicability of r. 1D. Their Lordships of the Hon'ble Supreme Court after taking note of various earlier decisions of the Supreme Court and of various High Courts summarised their conclusion which are printed at page 34 of the said report (namely, 207 ITR). We deem it useful to reproduce the same for proper appreciation and disposal of this petition filed by the Revenue. "(1) Rule 1D is perfectly valid and effective. The rule has 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. All the authorities under the Act including the Valuation Officer are bound by the said rule. The question of the rule being mandatory or directory does not arise. (2) While valuing the unquoted equity shares under r. 1D, no deductions on account of capital gains tax, which would have been payable in case the said shares were sold on the valuation date, can be made. Similarly, no other deductions including provision for taxation, provident fund and gratuity are admissible. Rule 1D is exhaustive ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on'ble Supreme Court in Singhania's case as prayed for by the Revenue in its application filed under s. 35 of the Act. 4. The learned Departmental Representative appearing for the Revenue submitted that the order passed by this Tribunal on 30th Dec., 1993 has to be rectified in terms of s. 35 of the WT Act and has to be brought in conformity with the judgment of the Hon'ble Supreme Court in terms of the ratio laid down in Singhania's case. According to the Departmental Representative, on account of the said latest judgment of the Hon'ble Supreme Court, a mistake of law apparent on record exists in our said order of 30th Dec., 1993 and the same, therefore, has to be rectified by passing another order bringing it in conformity with the recent and latest judgment of the Hon'ble Supreme Court. The learned Departmental Representative was also fair enough to submit and bring it to our notice that Ahmedabad 'C' Bench of this Tribunal comprising of Hon'ble Brother Sri B.M. Kothari and Hon'ble Brother Shri Phool Singh has dismissed a similar miscellaneous application filed by the Revenue, through order dt. 17th June, 1994 in MA No. 18/Ahd/1994 arising out of WTA Nos. 670 671/Ahd/1990 p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te authority did not agree with the Assessing Officer and directed him to value those unquoted equity shares on profit earning or yield basis on the basis of the Supreme Court's decision in the case of Smt. Kusumben D. Mahadevia, and this Tribunal approved the decision of the first appellate authority. Now in Feb., 1994, the Hon'ble Supreme Court finally interpreted the true effect, meaning, purpose and applicability of r. 1D by laying down in Singhania's case that the said rule is mandatory; that it is binding on all the authorities functioning under the WT Act including the Valuation Officer; that the unquoted equity shares have to be valued as per the method prescribed in r. 1D r/w relevant clauses of Expln. II of the said rule, etc., and which we have extracted elsewhere above in this order. That being the situation, now a mistake of law in this Tribunal's order is apparent and brazenly visible and, therefore, the demand of justice and the law contained in s. 35 of the WT Act is that the erroneous order should be rectified and respectfully brought in consonance and in conformity with the judgment of the Highest Court of the land rendered in Singhania's case. 7. The Hon'ble S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be deemed to have been allowed in terms of the opinion expressed in the said judgment. It is further directed by Their Lordships that all reference applications of the Revenue which have been dismissed by the Tribunal shall be deemed as allowed and questions asked for shall be deemed to have been referred and answered in terms of the said judgment. The apex Court has further held that all appeals filed by the assessees against the orders of the High Court dismissing their reference applications are dismissed and that the Tribunals shall pass appropriate order in each case accordingly. From these directions, there is no scope or room for any authority, including this Tribunal, to say that the judgment of the Hon'ble Gujarat High Court in the case of Ashok K. Parikh is still pending for adjudication before the Hon'ble Supreme Court and that the same has not been overruled by the apex Court through the judgment in Singhania's case. 10. This Tribunal, in any appeal coming up for consideration after the judgment of the Supreme Court in Singhania's case, on the issue of valuation of unquoted equity shares of companies have to essentially follow and abide by the judgment and direction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty shares and now after a lapse of many years it has become evident from the judgment of the Hon'ble Supreme Court rendered in Singhania's case that he did not commit any error but it is the appellate authorities, including this Tribunal, which committed mistakes and errors of law. No further investigation or enquiry is required to be made either by this Tribunal or by the Assessing Officer on the basis of the judgment of the Supreme Court in Singhania's case. 15. For these reasons, we are inclined to allow this miscellaneous application of the Revenue and not dismiss it, as has been done by our learned Brothers in MA 18/Ahd/1994. 16. We would like to say and add hastily that when we read the judgment of apex Court in Singhania's case in its entirety and that too vividly and in a proper perspective and with correct judicial approach, we do not find that this case or any other case for that matter, about the valuation of unquoted equity shares of companies as per r. 1D of the WT Rules, require any further enquiry or investigation of facts or otherwise or that a debate can ensue on the strength of the elaborate and well reasoned judgment of the Hon'ble Supreme Court in Singhani ..... X X X X Extracts X X X X X X X X Extracts X X X X
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