COMMISSIONER OF WEALTH TAX Vs. KARAN THAPAR
LAWS(CAL)-1996-8-19
HIGH COURT OF CALCUTTA
Decided on August 29,1996

COMMISSIONER OF WEALTH-TAX Appellant
VERSUS
KARAN THAPAR Respondents

JUDGEMENT

- (1.)By this reference at the instance of the Commissioner of Wealth-tax (Central-IX), Calcutta, the following questions have been referred by the Tribunal to this court for answer under Section 27(1) of the Wealth-tax Act, 1957 :
" (1) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that for computing the average book profits of the company in which the assessee held shares on the relevant valuation date, the profits of five completed years immediately preceding the valuation date, should be taken into account when the Tribunal itself in W. T. As. Nos. 554, 555 and 556/(Cal) of 1980, in the case of Manmohan Thapar, dated 28th February, 1992, held that the profit of the accounting period ending with the valuation date is to be included for finding out the average profit for this purpose ? (2) Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the five year period as mentioned in the Central Board of Direct Taxes' Circular No. 332A, dated 31st March, 1982, should be counted by excluding the accounting year ending with the relevant valuation date ?"

(2.)The facts leading to this reference are that the assessee in the present case is a resident individual and the assessment year involved in 1987-88 for which the relevant valuation date is March 31, 1987.
(3.)In this case while computing the book profits for five years preceding the relevant valuation date of the company, Karamchand Thapar and Bros, Ltd., in which the assessee held certain shares on the relevant valuation date, the Assessing Officer held that the profits of the accounting period ending with the valuation date and of four preceding years were to be taken into account. However, the assessee contended that five years preceding the assessment year were to be taken into account and not four years as has been considered by the Assessing Officer. The contention of the assessee was not accepted by the Assessing Officer. The matter was taken up in appeal before the Commissioner of Wealth-tax (Appeals) by the assessee.
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