Case: Commissioner of Wealth Tax, Bombay City III Vs. Michel Postel

1. The only question that arises for decision in these appeals is whether the High Court was justified in rejecting the application of the department to call for a statement of case from the Tribunal along with the question of law " Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the provision in respect of additionalx under section 23A of the Indianx Act, 1922/section 104 of thex Act, 1961, should be deducted in computing thep value of the shares of Franco Indian Pharmaceutical Pvt. Ltd. for purposes of thex assessments of the assessee for the assessment years2 and3 ?"      2. The Tribunal declined to submit that question and the High Court dismissed the application of the department to call upon the Tribunal to submit that question for its opinion along with the statement of case.

Reasoning: In these appeals we are concerned with the valuation of the assessees wealth during the years ending March 31, 1960, March 31, 1961, and March 31, 1962. One of the points contested by the department related to the computation of the value of the shares held by the assessee in two companies, viz., Franco Indian Manufacturers Pvt. Ltd. and Franco Indian Pharmaceutical Pvt. Ltd. To both these companies, section 23A of the Indianx Act, 1922, or its corresponding provision in the 1961 Act could be applied if the conditions prescribed therein are satisfied. It was found by the Tribunal that the provision was applied during the assessment year. For the assessment year1 tax under section 23A was paid under a settlement. In calculating thep value of the shares in these companies, the assessee wanted the additionalx leviable under section 23A of the Indianx Act, 1922, or leviable under section 104 of thex Act, 1961, to be deducted in addition to the deduction of other liabilities. Thex Officer rejected that claim. In appeal the Appellate Assistant Commissioner allowed the deductions. The Tribunal upheld the decision of the Appellate Assistant CommissionerFrom the facts set out above, it is quite clear that the question of law formulated by the department did arise for consideration. The Tribunal erred in opining that its finding that the additional tax payable under section 23A is deductible, is a finding of fact, . Hence, the Tribunal was wrong in refusing to refer that question for the opinion of the High Court under section 27(1) of the Act, The High Court also erred in not calling upon the Tribunal to refer that question for its opinion along with a statement of case. There is hardly any doubt that the question set out above did arise from the order of the Tribunal and that question is a question of law.