Asit Kumar Bisi, J. - (1.) On a reference under Section 27(3) of the Wealth Tax Act, 1957 the following questions of law have been referred for our opinion:- 1. Whether, on the facts and in the circumstances of the case, the Tribunal is justified in law in holding that assumption of jurisdiction by the Commissioner of Wealth Tax, under Section 25(2) of the W.T. Act, was not correct, when the mistake in the matter of treatment of proposed dividend as liabilities, has been admitted by the Tribunal. 2. Whether, on the facts and in the circumstances of the case, the Tribunal is justified in holding on the basis of the statement filed by the assessee, that cumulative value of the shares of various companies determined by the WTO was in excess of their value as per break up value method when details contained in the said statement are not discussed by the Tribunal in its order.
(2.) The assessment years involved in the reference relate to 1982-83 and 1983-84 for which the valuation dates were 31st March, 1982 and 31st March, 1983 respectively. The assessments were completed by the Assessing Officer under Section 16(3) of the Wealth Tax Act, 1957 (hereinafter referred to as "the Act") accepting the computation of the value of the unquoted equity shares in five companies by break-up method as submitted by the Assessee. On examination of the assessment records, the Commissioner of Wealth Tax found that the Assessing Officer made the following irregularities in valuing the shares which are contrary to the provisions of Rule 1D of the Wealth Tax Rules, 1957:- (i) Items like advance-tax and prepaid expenses were treated as assets for the purpose. (ii) Items like amount set apart for payment of dividend where such dividends were not declared before the valuation date at a general meeting of the Company, were taken as liabilities. (iii) Provisions for taxation in excess of the tax computed with reference to above profits, were treated as liabilities.
(3.) The Commissioner of Wealth Tax concluded that because of the above irregularities the assessments of the Assessing Officer for the aforesaid two years were erroneous and pre-judicial to the interest of revenue and therefore, the assessment orders were set aside by the Commissioner of Wealth Tax by invoking the provisions of Section 25(2) of the Act.;