Wealth Tax Rules, 1963---

----R.8---Wealth Tax Act (XV of 1963), S.27---Appeal to High Court---Break-up value of shares of company---Determination---Principles---Surplus on revaluation of the fixed assets of the company could be excluded while determining the break-up value of shares---Any amount not realized on revaluation of assets cannot be treated as a free reserve nor could it be considered as part of profit and loss account.

W.T.A. No.317 of 2002 fol.

Mian YousafUmerfor Appellant.

ORDER

The question of law claimed by the Commissioner of Income Tax/Wealth Tax to arise in the present appeal is as to whether the surplus on revaluation of the fixed assets of the Company could be excluded while determining the break-up value of the shares.

2. The above question as raised was considered and determined by this Court in a number of judgments including judgment, dated 29-1-2004 in W.T.A. No.317 of 2002 passed by a Division Bench (of which one of us: Muhammad Sair Ali, J, was a member). In the above referred judgment, it was held as under:

"(4) After hearing the learned counsel for the parties we will readily agree with the learned counsel for the respondent that any amount not realized on revaluation of assets cannot be treated as a free reserve as was done by the Assessing Officer nor could it be considered as part of profit and loss account. In that regard he has made reference to the provisions of section 235 of the Companies Ordinance, 1984 (Treatment of surplus arising out of revaluation of assets). According to him revaluation done in the case of the assessee did not qualify even for depreciation much less to take it as a part of profit and loss account or an account which can in any manner add to the wealth of the Company.

(5) That being as, we are of the view that the question as framed needs to be answered in the affirmative."

3. The question of law raised in the present appeal is the same. As such in view of the reasons and ratio decidendi of the above referred judgment in WTA No.317 of 2002, this appeal is also decided and disposed of in terms thereof.

M.B.A./C-120/LOrder accordingly.