K.L.Roy, J. - (1.) This is a reference under Section 27 (1) of the Wealth Tax Act, hereinafter referred to as the Act.
(2.) The assessee is an Individual and the assessment year concerned is 1958-59 for which relevant valuation date is March 31, 1958. On the valuation date, the assessee was the registered holder of 650 ordinary shares of the face value of Rs. 1,000/- each in Messrs. Indra Singh, and Sons Private Limited. The Wealth Tax Officer valued these shares at Rs. 3884/- per share as on March 31, 1958 on the basis of the assets and liabilities as disclosed by the balance sheet of that company on that date. The Wealth Tax Officer rejected the assessee's claim for deduction of various amounts in computing the net assets of the company on the basis of its balance-sheet. The assessee's appeal to the Appellate Assistant Commissioner against the order of assessment failed. On further appeal to the Tribunal, the assessee contended that the levy of wealth tax was unconstitutional and beyond the legislative competence of the Parliament and in particular violative of Articles 14, 19, 31 and 265 of the Constitution and the entries in the legislative list of the Union. It was further contended that in determining the break-up value of the shares of Messrs. Indra Singh and Sons Private Limited the following deductions should have been allowed, namely:-- i) Rs. 9,50,000/-, being the estimated tax liabilities on the profits earned by the assessee for the year ending March 31, 1958, in addition to the provision for taxation already made in the balance-sheet. ii) Rs. 3,87,500/- being the uncalled liability on shares of certain companies which were only partly paid up. iii) A sum of Rs. 2,47,912/- in respect of the claim pending against the company in certain suits which had been instituted against the company and had not yet been finally decided. iv) A sum of Rs. 11,40,776/- on account of the aggregate profits deemed to have been declared under the provisions of Section 23A of the Indian Income-tax Act, 1922, relating to the years ending March 31. 1952 and March 31, 1953 and a further sum of Rs. 2,36,336/- on account of penal tax under Section 23A on the company for the year ending March 31 1955 (v) A sum of Rs. 6,23.736/- being 10% of the sum of Rs. 62,37,363/- shown in the company's balance-sheet as loans and advances which the assessee estimated to be doubtful or bad.
(3.) The Tribunal rejected the assessee's claim for deduction of any of the aforesaid items. It also did not accept the assessee's contention that the Wealth Tax Act was in any way ultra vires the constitution.;