I. S. NIGAM, A.M. Against order of CWT (A) VII, Bombay, both Revenue and assessee have come up in appeal before us. Both appeals are, therefore, disposed of by consolidated order. assessee is individual. appeals relate to asst. yr. 1980-81. Among assets, value of which was disclosed in wealth-tax return was assessee's proprietary concern, M/s V.B. Garware & Co., in which business of dealing in shares was carried on. According to regular account books of business of V.B. Gareware & Co., including balance sheet of business, closing stock at end of year consisting of shares of various companies was valued at cost or market value, whichever was lower. In this way value of closing stock was worked out at Rs. 23,56,263. WTO, however, held that where shares in closing stock were valued at cost, their market value should be substituted for cost. He, therefore, picked up these shares and market value of these shares exceeded cost by Rs. 85,379. WTO, therefore, while determining value of assessee's proprietary business M/s V.B. Gareware & Co., increased value shown by assessee, i.e. Rs. 23,61,245 by Rs. 85,379. WTO also did not accept assessee's claim that shares of M/s Garware Plastics and polyester Pvt. Ltd. should be worked out under yield capitalisation method and not under break up method prescribed by r. 1D of WT Rules, 1957. WTO included in assessee's net wealth amount under Compulsory Deposit (Income Tax Payers) Act, 1974. On appeal, CWT(A) held that since difference in value of closing stock shown in balance sheet and taken for income-tax purposes, viz, Rs. 23,56,263 and value now taken by WTO i.e. Rs. 24,41,642 did not exceed 20 per cent there was no justification to disturb value of closing stock shown in balance sheet and adopted for purpose of income assessment. He, therefore, deleted addition of Rs. 85,379 on this account. He further held that unquoted equity shares of M/s Garware Plastics and Polyester Pvt. Ltd. should be valued under yield capitalisation method and not under break up method prescribed by r. 1D of WT Rules, 1957. CWT (A) while upholding inclusion of amount under Compulsory Deposit (Income-Tax Payers) Act, 1974 in assessee's net wealth directed WTO to include only discounted present value of deposit for purpose of inclusion in assessee's net wealth. Against order of CWT(A) both Revenue and assessee have come up in appeal before us. grievance of Revenue is that CWT (A) wrongly directed WTO to value shares of M/s Garware Plastics and Polyester Pvt. Ltd. under yield capitalisation method instead of under break-up method prescribed by r. 1D of WT Rules, 1957 adopted by WTO and CWT (A) wrongly held that closing stock of M/s V.B. Garware & Co., proprietary concern of assessee, cannot be valued under r. 2B(1)(c) of WT Rules and on that ground directing WTO to adopt value declared by assessee. On other hand, grievance in appeal filed by assessee is that CWT(A) wrongly directed that even present discounted value of amount under Compulsory Deposit (Income Tax Payers) Act, 1974 could be in assessee's net wealth. ld. departmental representative, Shri Kamat on authority of Hon'ble High Court of Kerala in case of CWT vs. Mamman Varghese & Ors. (1980) 15 CTR (Ker )135: (1983) 39 ITR 351(Ker) and Hon'ble High Court of Allahabad in cases of CWT vs. Sripat Singhania 1977 CTR (All) 119: (1978) 112 ITR 363 (All), CWT vs. Padampat Singhania (1979) 9 CTR (All) 56: (1979) 117 ITR 443 (All) and Bharat Hari Singhania vs. CWT (1979) 9 CTR (All) 316: (1979) 119 ITR 258 (All) submitted to us that r. 1D of WT Rules, 1957 was mandatory and should, therefore, be applied for valuation of unquoted equity shares of companies. On this basis he submitted that CWT(A) wrongly directed WTO to value unquoted equity shares of Garware Plastics and Polyester Pvt. Ltd. under yield capitalisation method in place of break up method prescribed by r. 1D of WT Rules. 1957. ON other hand, assessee's ld. counsel, Shri Shah, cited before us authority of Hon'ble Supreme Court in cases of CWT vs. Mahadeo Jalan & Ors 1972 CTR (SC) 395: (1972) 86 ITR 621 (SC) and CGT vs. Smt. Kusumben D. Mahadevia (1980) 14 CTR (SC) 366: (1980) 122 ITR 38 (SC) in support of contention that where company was going concern and not ripe for liquidation or winding up and there were no special circumstances like fluctuations of profits or uncertainty of conditions, which prevented any reasonable estimation of profit earning capacity of company, only proper method of valuation was under yield capitalisation method based on profit earning capacity of company. He then referred to ruling of Hon'ble High Court of Bombay in case of Smt. Kusumben D. Mahadevia vs. CWT (1980) 14 CTR (Bom) 20: (1980) 124 ITR 799 (Bom) wherein their Lordships laid down that r. 1D of WT Rules, 1957 prescribing break up method for valuation of unquoted equity shares of companies was merely directory and not mandatory. He, therefore, justified direction of CWT (A) to WTO to value of shares of M/s Garware Plastics and Polyster Pvt. Ltd. under yield capitalisation method. We have carefully considered rival submissions. With very great respect to rulings of Hon'ble High Court of Kerala and Hon'ble High Court of Allahabad cited by ld. departmental representative, Shri Kamat, we are inclined to follow ruling of Hon'ble High Court of Bombay in case of Smt. Kusumben D. Mahadevia vs. CWT (supra) and rulings of Hon'ble Supreme Court in cases of CWT vs. Mahadeo Jalan and Ors. (Supra) and CGT vs. Smt. Kusumben D. Mahadevia (supra). Viewed in this context, it is not under dispute that company, M/s Garware Plastics and Polyester Pvt. Ltd. was going concern, which was not ripe for liquidation or winding up and there were no special circumstances like fluctuations of uncertainty of conditions on relevant valuation date, which prevented any reasonable estimation of profit earning capacity of company. only proper method of valuation of unquoted equity shares of M/s Garware Plastics and Polyester Pvt. Ltd. was, therefore, under yield capitalisation method based on profit earning capacity of company. direction of CWT (A) on this issue, therefore, in our view, appears to be correct and is upheld. next grievance in appeal filed by Revenue is against valuation of closing stock of proprietary business of M/s V.B. Garware & Co. at Rs. 23,56,263 shown in balance sheet of business carried on assessee and adopted for purpose of income tax assessment instead of Rs. 24,41,642 worked out by WTO. ld. departmental representative, Shri 24,41,642 worked out by WTO. ld. departmental representative, Shri Kamat, submitted to us that words "an asset" appearing in sub-r.(1) of r. 2B of WT Rules mean every share constituting closing stock and it was, therefore, open to WTO to substitute for value of shares in closing stock taken at cost, market value of those shares in working out value of assessee's proprietary business. Reference in this connection was made by him to order of Tribunal in case of WTO vs. Shri Sangram Singh P.Gaekwad (WTA Nos. 923 to 930/Ahd/80) wherein Tribunal held that r. 2B(2) can be applied in relation to each group of shares. He, therefore, justified addition of Rs.. 85,379 on this account made by WTO and submitted to us that addition was wrongly deleted in appeal by CWT(A). On other hand, assessee's ld. counsel, Shri Shah, at outset pointed out that in case of Shri Sangram Singh P. Gaekwad cited by ld. departmental representative, Shri Kamat, assessee was investor in shares and not carrying on business unlike in present case where assessee was carrying on business of dealing in shares for which regular accounts were maintained and shares at end of year constituted closing stock of business, value of which was adopted at cost or market value, wherever was lower in accordance with well known system of accounting and which value was not only shown in Balance Sheet of business but was also adopted for purposes of income tax assessment. He, therefore, justified order of CWT (A) on this issue. We have carefully considered rival submissions. Rule 2B of WT Rules, 1957 under consideration here reads as follows: "Adjustments in value of asset disclosed in balance-sheet. B (1) value of asset disclosed in balance-sheet shall be taken to be (a) in case of asset on which depreciation is admissible, its written down value; (b) in case of asset on which no depreciation is admissible, its book value; (c) in case of closing stock, its value adopted for purposes of assessment under IT Act, 1961, for previous year relevant to corresponding assessment year. (2) Notwithstanding anything contained in sub-rule (1) where market value of asset exceeds its written down value or i t s book value or value adopted for purposes of assessment under Income-tax Act, 1961, as case may be, by more than 20 per cent, value of asset shall, for purposes of rule 2A, be taken to be its market value" reading of this rule clearly shows that distinction is sought to be drawn between "an asset" on which either depreciation is admissible or depreciation is not admissible and closing stock. Besides, sub-r. (2) of r. 2B clearly lays down that where market value of asset exceeds its Written down value or its book value or value adopted for purposes of assessment under IT Act, as case may be, by more than 20 per cent value of that asset shall for purposes of r. 2A be taken to be its market value. This shows that in closing stock value adopted for purposes of assessment under IT Act for previous year relevant to corresponding assessment year has to be taken into account and unless market value of closing stock exceeds value adopted for purposes of assessment by more than 20 per cent, value shown in Balance Sheet and adopted for purposes of assessment should not be disturbed. Obviously for this purpose, closing stock shown in Balance Sheet as whole has to be considered and not each and every item constituting closing stock, which will simply not be possible in big company where items constituting closing stock may run into thousands and scrutiny of each item might simply not be possible. Considering all this, we have no hesitation in coming to conclusion that since market value of closing stock did not exceed value shown in Balance Sheet and adopted for purposes of assessment under IT Act, 1961 for previous year relevant to corresponding assessment year by even four per cent, what to say of twenty per cent as already described, there was no justification to disturb value of closing stock as shown in Balance Sheet of business and adopted for purposes of assessment under IT Act, 1961 for previous year relevant to corresponding assessment year. addition on this account made by WTO was therefore, not justified and was rightly deleted in appeal by CWT (A). On issue raised in appeal filed by assessee, viz., inclusion of discounted present value of deposit under Compulsory Deposit (Income Tax Payers) Act, 1974 in assessee' net wealth, which was claimed to be exempt from wealth tax, assessee filed before us declaration under s. 18C(1) that identical issue cropped up for asst. yr. 1977-78 and was referred to Hon'ble High Court by statement of case dt. 18th Feb., 1986 in RA No. 1634/Bom/1984. WTO by letter dt. 5th Jan.,1987 confirmed that claim of identical question having arisen in reference for asst. yr. 1977-78 (RA No. 1634/Bom/1984), was correct. On this issue, therefore, we, while upholding order of CWT(A), direct that when decision on identical question of law referred to Hon'ble High Court becomes final, it shall be applied for this year as well and order of Tribunal shall, if necessary, be amended in conformity with such decision. appeals filed by both Revenue and by assessee for statistical purpose will be treated as dismissed. *** WEALTH-TAX OFFICER v. SMT. VS. B. GARWARE