| Case ID |
092656ab-a289-468f-9e33-4a3c93519c29 |
| Body |
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| Case Number |
W. T. A. No. 160/IB of 1999-2000 |
| Decision Date |
Oct 25, 1999 |
| Hearing Date |
Oct 18, 1999 |
| Decision |
The Income Tax Appellate Tribunal decided that the valuation of shares in unlisted companies must adhere to the principle that the method of determining market value is crucial. The Tribunal vacated the previous order of the First Appellate Authority which directed the Assessing Officer to accept the face value of the shares. It was determined that Rule 8(2)(c)(i) of the Wealth Tax Rules, which allowed for the valuation of shares at face value or break-up value, was ultra vires the Wealth Tax Act because it lacked reference to market value. Thus, the Assessing Officer's practice of using break-up value for unlisted shares was deemed justified, leading to the restoration of the Assessing Officer's order. |
| Summary |
This case revolves around the valuation of shares held by an assessee in an unlisted company under the Wealth Tax Rules, 1963. The appellant contested the valuation made by the Assessing Officer, which was based on break-up value, arguing that the applicable rules were ultra vires. The case highlights the importance of market value in asset valuation and clarifies that rules lacking such reference are invalid. The Tribunal's decision underscores the significance of adhering to established legal frameworks in tax assessments and reinforces the principle that the break-up value should be considered as the market value for unlisted shares. This ruling is significant for taxpayers and legal practitioners dealing with wealth tax assessments, as it clarifies the legal standards for valuing unlisted company shares, ensuring fair treatment in tax matters. The keywords trending in this context include 'Wealth Tax', 'Valuation of Shares', 'Market Value', 'Tax Law', and 'Income Tax Tribunal'. |
| Court |
Income Tax Appellate Tribunal
|
| Entities Involved |
Not available
|
| Judges |
MANSOOR AHMED, ACCOUNTANT MEMBER,
KARAMAT HUSSAIN NIAZI, JUDICIAL MEMBER
|
| Lawyers |
Not available
|
| Petitioners |
Not available
|
| Respondents |
Not available
|
| Citations |
2000 SLD 1554,
2000 PTD 1169,
(2000) 81 TAX 51
|
| Other Citations |
1998 PTD 3900
|
| Laws Involved |
Wealth Tax Rules, 1963,
Wealth Tax Act, (XV of 1963)
|
| Sections |
8(2)(c)(i),
46(2)(a)
|