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Issues:
1. Determination of market value of gifted shares based on balance-sheet date 2. Inclusion of provision for gratuity in calculating total assets for share valuation 3. Deduction of dividends from total asset value for share valuation 4. Application of discount percentage in determining share value 5. Justification for considering higher discount percentage by the Tribunal Analysis: 1. The case involved a dispute regarding the proper balance-sheet date to be considered for determining the market value of shares gifted by the assessee. The Tribunal had relied on the balance-sheet as of March 31, 1973, while the Revenue contended that the balance-sheet as of March 31, 1974, should be considered. The High Court, referencing a Supreme Court decision, held that the balance-sheet closer to the gift date, i.e., March 31, 1974, should be used. The first question was answered against the Tribunal, directing the assessment based on the 1974 balance-sheet. 2. The second issue revolved around whether the provision for gratuity should be included in the calculation of total assets for determining the share value. Citing a previous court decision, the High Court ruled in favor of including the provision for gratuity as an ascertained liability, thereby affirming the Tribunal's decision on this aspect. 3. Questions 3 to 5 were left unanswered by the High Court as they were contingent on the resolution of the first question regarding the balance-sheet date. The court adopted a similar approach from a previous case, emphasizing the need for the Tribunal to determine the share value based on the correct balance-sheet date before addressing further valuation considerations. 4. The Tribunal's decision to apply a 30% discount in calculating the break-up value of the shares was not directly addressed by the High Court in this judgment. However, the court's emphasis on the correct balance-sheet date suggests that the application of any discount should align with the accurate valuation methodology based on the relevant financial information. 5. Lastly, the High Court did not provide a direct answer to the question of justifying a higher discount percentage beyond 15% considered by the Tribunal. The court's focus on the primary issue of balance-sheet date for valuation indicates the importance of establishing a correct foundation for share valuation before delving into additional discount considerations. This detailed analysis of the judgment highlights the key legal issues addressed by the High Court in the context of determining the market value of gifted shares and the relevant considerations for accurate valuation under the Gift-tax Act, 1958.
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