TMI Blog1982 (9) TMI 105X X X X Extracts X X X X X X X X Extracts X X X X ..... also the facts were similar and the decision of their Lordships was that rental method was the best method to value such property. 3. On behalf of the revenue, the above submission was resisted and it was pointed out that no principle of valuation could dictate taking up of valuation at an unrealistic figure and that there could be no better evidence of the value of a certain property than the sale price of the property itself. According to the learned departmental representative, the property under consideration came to be sold in January 1976 for Rs. 6,50,000 and, therefore, if the value of the property is worked back from January 1976, the valuations adopted and sustained by the learned AAC and detailed as below, would not be found to be unrealistic : "Assessment year Rs. 1964-65 3,16,000 1965-66 3,41,000 1966-67 3,66,000 1967-68 3,91,000 1968-69 4,16,000 1969-70 4,41,000 1970-71 4,66,000 1971-72 4,91,000 1972-73 5,16,000 1973-74 5,41,000 1974-75 5,66,000" In rejoinder, the learned counsel for the assessee submitted that the property when it was sold in January 1976 had become vacant and, therefore, the price which it fetched in January 1976 would no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve successive assessment years commencing with the assessment year next following the date on which such company commences the operations for which it has been established ;" Clause (d) of section 45 of the Act to which reference has been made above, may also be noted at this stage. It reads as follows : "45. No tax shall be levied under this Act in respect of the net wealth of-- (d) any company established with the object of carrying on an industrial undertaking in India in any case where the company is not formed by the splitting up, or the reconstruction, of a business already in existence or by the transfer to a new business of any building, machinery or plant used in a business which was being previously carried on :" 6. The contention of the assessee was that the shares held by him in Indo-Japan Steels Limited were exempt under the aforesaid clause (xx) of sub-section (1) of section 5 as the said shares formed part of the initial issue of shares by the said company, and that the said company was of the type mentioned in clause (d) of section 45. The above plea of the assessee was, however, negatived by the WTO by pointing out that the provisions of clause (d) of secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s that the broad scheme of the two Acts, namely, the 1961 Act and the Act was to encourage new industrial undertakings and also to encourage investment in the shares of such undertakings and for that purpose whereas the income of the company in question was granted relief in terms of section 80J, the shareholders were granted identical relief under section 80K of the 1961 Act. Under the Act also, similar treatment was intended to be meted out to the company as well as to the shareholders. The company was exempted from tax under clause (d) of section 45, whereas the shareholders were granted exemption in terms of clause (xx) of sub-section (1) of section 5. It would, therefore, not be proper at all to grant exemption to the company and to the shareholders under the 1961 Act but not to grant the same to the company under the Act. 10. On behalf of the revenue, the orders of the authorities below were stoutly supported. 11. We have given our careful consideration to the contentions raised above. Whatever might be the broad scheme of the two Acts, we have to go by the specific language used by the Legislature to effectuate its will and it may not always be correct to go by the princ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch industrial undertaking as is referred to in section 33B, in the circumstances and within the period specified in that section : Provided further that, where any building or any part thereof previously used for any purpose is transferred to the business of the industrial undertaking, the value of the building or part so transferred shall not be taken into account in computing the capital employed in the industrial undertaking : Provided also that in the case of an industrial undertaking which manufactures or produces any article specified in the list in the Eleventh Schedule, the provisions of clause (iii) shall have effect as if for the words 'thirty-three years', the words 'thirty-one years' had been substituted. Explanation 1 : For the purposes of clause (ii) of this sub-section, any machinery or plant which was used outside India by any person other than the assessee shall not be regarded as machinery or plant previously used for any purpose, if the following conditions are fulfilled, namely :-- (a) such machinery or plant was not, at any time previous to the date of the installation by the assessee, used in India ; (b) such machinery or plant is imported into Ind ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g provision under the Act. Similarly, proviso 1 stipulates that "the conditions in clause (i) shall not apply in respect of any industrial undertaking which is formed as a result of the re-establishment, reconstruction or revival by the assessee of the business of any such industrial undertaking as is referred to in section 33B, in the circumstances and within the period specified in that section". Proviso 2 also visualizes the transfer of building or any part thereof previously used for any purpose to the new industrial undertaking. None of these provisions are contained in clause (d) of section 45. Therefore, the argument of the learned counsel for the assessee that the exemption under clause (xx) of sub-section (1) of section 5 should be granted invariably in every case to which the benefit of section 80J is available does not appear to us to be correct and we, accordingly, reject it. In the present case, it has not been denied by the assessee's learned counsel that the plants, machinery and building of Grand Smithy Works were transferred to the assessee-company at the time of its formation. What is, however, pointed out by him is that the value of such assets is hardly Rs. 24,7 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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