JUDGMENT
1. The Income-tax Appellate Tribunal, Allahabad, has referred the following question of law under Section 27(1) of the Wealth-tax Act, 1957, hereinafter referred to as "the Act", for opinion to this court :
"Whether, in law and on facts of the case the Tribunal was justified in dismissing the Department's appeals and in holding that while determining the value of unquoted shares of M. P. Sugar Mills Co, Ltd., deduction on account of addition/deferred cane price liability had to be deducted even, if the provision to this effect had not been made in the balance-sheet of the company ?"
2. Briefly stated the facts giving rise to the present reference are as follows :
The present reference relates to the assessment years 1971-72 to 1974-75. The respondent had some equity shares of M/s. M. P. Sugar Mills Ltd. While computing the value of such shares in accordance with Rule 1D of the Wealth-tax Rules, the Wealth-tax Officer did not allow the deduction on account of deferred cane price, which was the liability of the company on the ground that the said liability was not shown in the balance-sheet of the company. However, the Appellate Assistant Commissioner accepted the claim of the respondent which has been affirmed by the Tribunal.
3. We have heard Sri Dhananjay Awasthi, learned standing counsel appearing for the Revenue.
4. Under Rule 1D of the Wealth-tax Rules, which relates to the determination of value of unquoted equity shares, only such liabilities as are specifically mentioned in the rule have to be deducted. Rule 1D provides that the value of all the liabilities as shown in the balance-sheet of such company shall be deducted from the value of all its assets shown in that balance-sheet. Even the liabilities shown in the balance-sheet are not to be deducted as liabilities as specified in Clause (ii) of the Explanation II of the said Rule. As the liability in question has not been shown in the balance-sheet the question of deduction does not arise. In this view of the matter, we are of the considered opinion, that the Tribunal has committed a manifest error in allowing the deferred cane price liability when it was not shown in the balance-sheet while determining the value of unquoted equity shares under Rule 1D of the Rules. Accordingly, we answer the question referred to us in the negative, i.e. in favour of the Revenue and against the assessee. However, there shall be no order as to costs.