Sabyasachi Mukharji, J. - (1.) This reference arises out of the assessment made under the Wealth-tax Act for the assessment year 1959-60, for which the corresponding valuation date was 31st March, 1959. The assessee is an individual holding certain shares in Messrs. Hind Mills Ltd. and Shree Hanuman Sugar Mills Ltd. These shares are not quoted in the stock exchange. Before the Wealth-tax Officer it was not disputed that the break-up value of the shares of these companies computed on the basis of the balance-sheets should be taken as the market values thereof. The assessee, however, contended before the Wealth-tax Officer that in computing the break-up value, of the shares of Messrs. Hind Mills Ltd. and Sri Hanuman Sugar Mills Ltd., the depreciable assets of the two companies should be taken at their written down values as per income-tax records. The Tribunal was of the opinion that no depreciation had been shown in the balance-sheets and, therefore, it would be unrealistic to take the book value of the assets. The Tribunal came to the conclusion that the prospective buyers of the shares would take into consideration the fact that the assets of the companies concerned had depreciated year after year due to use, although no depreciation had been shown in the balance-sheets. The Tribunal, therefore, directed that the written down values of such depreciable assets should be taken instead of the values shown in the respective balance-sheets.
(2.) Another contention was put forward by the assessee that the dividends proposed but not declared by Messrs. Hind Agents Private Ltd. and Shri Hanuman Sugar Mills Ltd., as on the relevant valuation date should be deducted from the gross value of the assets of the companies. The Tribunal was of the opinion that they should be so deducted and directed the Wealth-tax Officer to recompute the break-up value of the shares after allowing the dividends proposed by the companies but not declared on or before the relevant valuation date.
(3.) The third contention of the assessee before the Tribunal was that in computing the break-up value of the shares of Sri Hanuman Sugar Mills Ltd., a further deduction should be allowed from the gross value of the assets in respect of the agricultural income-tax, amounting to Rs. 1,63,385, which had been paid under protest to the Bihar Government on account of the agricultural income-tax assessment as shown in the balance-sheet. The Tribunal was of the opinion that this sum of Rs. 1,63,385 was certainly a factor liable to be taken into account by the prospective buyers of the shares while estimating the market value. The Tribunal, therefore, directed that Rs. 1,63,385 be left out of the assets while computing the break-up "value of the shares of the company.;