1976 (8) TMI 43 - HC - Income Tax

Summary

Issues:
1. Valuation of shares in a gift tax case.
2. Jurisdiction of the Tribunal to determine value different from the claim made by the assessee.
3. Preliminary objection regarding the questions of law referred to the court.

Analysis:
1. The judgment pertains to a case involving the valuation of 4,690 shares in an Indian company for gift tax purposes. The late Smt. Moonghibai Goenka transferred these shares to trusts for her minor grandchildren. The Gift-tax Officer and the Appellate Assistant Commissioner disagreed with the valuation declared by the legal representative of the deceased, leading to an appeal before the Income-tax Appellate Tribunal. The Tribunal appointed valuers who valued the shares at Rs. 5,92,112, which was lower than the declared value of Rs. 6,48,520. The Tribunal accepted this valuation and allowed the appeal, prompting a challenge to the correctness of this order.

2. The main contention raised was whether the Tribunal had the jurisdiction to determine a value lower than the one claimed by the assessee. The revenue argued that the Tribunal should have adhered to the claim made by the assessee, especially since the assessee consistently maintained that the shares were worth Rs. 6,48,520. The revenue contended that the Tribunal exceeded its authority by fixing the value at Rs. 5,92,112, contrary to the claim made by the assessee in the appeal.

3. Additionally, a preliminary objection was raised regarding the questions of law referred to the court by the Tribunal. The counsel for the assessee argued that the questions did not arise from the Tribunal's order and, therefore, the court should decline to answer them. Citing precedents, the counsel emphasized that for a question to be considered as arising from the order, it must have been raised before the Tribunal and dealt with by them. In this case, since the Tribunal did not address the specific question raised by the revenue, it was contended that the reference itself was incompetent, and the court should not entertain the questions posed by the Tribunal.

In conclusion, the High Court of Madras declined to answer the questions referred by the Tribunal, citing that the questions did not arise from the Tribunal's order as required by the Gift-tax Act. The court found that the Tribunal had not been presented with the specific question raised by the revenue, rendering the reference incompetent. Hence, the court refused to provide an opinion on the issues raised and made no order as to costs.