The value of shares owned by an assessee in a limited company is includible in his net wealth subject to the application of Rule 2 of the Schedule to the Wealth-tax Act. The commutation amount payable to the assessee under the Jagirs Abolition Regulation and the Jagirs Commutation Regulation is includible in his net wealth.

( 1 ) THE Income-tax Appellate Tribunal has referred the following two questions under Section 27 of the Wealth Tax Act 1957 (No. 27 of 1957) namely, (i) whether the value of the shares owned by the assesses in the limited company was property includible in his wealth as on the valuation dates under Section 4 (1) of the Act? (2) whether the compensation sanctioned by the Government on the abolition of the assessees Jagir, though not paid but due to the assessee as on the valuation dates, was property includible in the net wealth of the assessee under Section 4 (1) of Act? these questions arose out of the wealth tax assessment of the assessee for the year 1957-58 for which the valuation date was 30-9-1956 and for the assessment year 1958-59 for which the valuation dale was 30-9-1957. It appears from the statement of the case that the assesses owns house properties and shares in limited companies and is entitled to commutation mounts under the Hyderabad (Abolition of Jagirs) Regulation 1358f (No. LXIX of 1358f.) and the Hyderabad Jagirs (Commutation) Regulation 1359f (No. XXV of 1359f. ). In respect of the inclusion of the shares of the limited companies and the commutation amount in the assessment for wealth tax for the two relevant years, the contention of the assessee was that since the shares of the company held by him represent the wealth of the limited company, the limited company was liable to pay tax on the same and the wealth as represented by the shares could not once again be included in his net wealth. This contention was negatived throughout by the income-tax officer, the Appellate Assistant Commissioner and the Tribunal, the last of which holding that the wealth of the limited companies was not coterminous with, or the same as, the wealth of a share-holder as represented by the value of the shares and that as there was no denial that the assessee was the owner of the shares it was properly included in his net wealth. At the time of hearing of the appeal, the assessee also sought permission of the tribunal to raise two additional grounds of appeal, one of which concerned the abatement of tax in respect of shares in assesses net wealth as provided by Rule 2 of the schedule to the Wealth Tax Act. But the tribunal refused to allow him to raise this contention as it was not raised before the Appellate Assistant Commissioner and as such it did not arise out of his orders. In our view, since the question, 33 framed, relates to the inclusion or non-inclusion of the value of the shares owned by the assessee in the limited companies in the net wealth of the assessee, dependant on whether the principle of double taxation is applicable or not, it will be permissible in determining this question to refer to the relevant provisions including rule 2 of the Schedule as indicating to what extent the Legislature has recognised the principle of double taxation or its avoidance. In the circumstances we would be justified in amending the question to bring about that sense. Accordingly question 1 is amended by the addition of the words "and subject to what provisions, if any" at the end of the question.

( 2 ) THE taxing Section 3 enjoins that a tax in respect of the net wealth on the corresponding valuation date of every individual, Hindu undivided family and company at the rate or rates specified in the schedule shall be charged for every financial year commencing on and from the first day of April, 1957. Section 4 sets out-what shall be included in computing the net wealth of an individual and in that definition the value of assets which on the valuation date are held by his wife by a minor child or by a person or association of persons to whom such assets have been transferred by the individual otherwise than for adequate consideration for the benefit of the individual or his wife or minor child, or by a person or association of persons to whom such assets have been transferred by the individual otherwise than under an irre