Commissioner of Income Tax vs Vijay Kumar (HUF)

This is a reference u/s 256(2) of the Income Tax Act, 1961. The learned Tribunal referred the following questions :

"1. Whether on the facts and in the circumstances of the case the Tribunal was legally correct in confirming the Appellate Assistant Commissioners orders who worked out the value of shares on the basis of break-up value method in the case of M/s. Carew and Company and Upper Ganges Sugar Company where the shares are quoted ones leaving aside the correct value as worked out by the approved valuer u/s 55A on the request of the assessee ?

Whether on the facts and in the circumstances of the case the Tribunal was legally justified in holding that provisions of section 52(2) are not applicable in this case ?"

Heard Sri Shambhu Chopra, learned Standing counsel for the revenue. None is present for the assessee.

The case is fully covered by the judgment of the Honble Supreme Court in Bharat Hari Singhania and others Vs. Commissioner of Wealth Tax (Central) and others, , wherein the same rule 1D of the Wealth Tax Rules, 1958, prescribing, the break-up method for valuing unquoted equity shares of a company (other than an investment company or a managing agency company) has been held to be perfectly valid and effective. Neither it is inconsistent with section 7(1) of the Wealth Tax Act, 1957, nor does it travel beyond the purview of section 7(1).

Thus, in view of the above, the question is answered in the favour of the assessee and against the revenue.