Commissioner of Wealth Tax vs T.R. Varadarajan

R. Jayasimha Babu, J.—The questions referred, which arise from the assessment of the respondent for the assessment year 1980-81 are as follows :

"1. Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in holding that the liabilities in dispute relating to the purchase of cotton shown in the notes to the balance-sheet should also be deducted in determining the value of shares ?

Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the proposed dividend of Rs. 2,52,000 for the year ended on September 30, 1978, declared on May 28, 1979, was eligible for deduction as a liability in arriving at the value of shares of the company ?"

A similar question concerning the same assessee for other assessment years was considered by this court in T. C. Nos. 54 to 56 of 1984 and connected cases, decided on December 24, 1997 Commissioner of Wealth-tax Vs. T.R. Kannan . For the reasons given in that judgment, the questions referred to us are required to be answered in the same manner as they were answered, in that case for those other assessment years. The first question is accordingly answered in favour of the Revenue, as the notes in the balance-sheet do not form part of the balance-sheet.

The second question is required to be answered in favour of the assessee. When a balance-sheet is not drawn up on the valuation date, but the balance-sheet drawn up on a date preceding the valuation date is available, that balance-sheet shall be adopted as the basis.

The questions are accordingly answered.