1986 (10) TMI 50 - AT - Income Tax

Summary

Issues: Valuation of unquoted shares under the Estate Duty Act

Analysis:
1. The appeal involved the valuation of 1612 shares of a private company owned by the deceased under the Estate Duty Act, 1953.
2. The accountable person valued the shares at Rs. 137 per share based on WT Rules, 1957, while the ACED valued them at Rs. 274 per share considering the company's assets and liabilities on the date of death.
3. The Controller (A) upheld the ACED's valuation under section 37 of the Act, rejecting the argument to value shares based on the last available balance sheet.
4. The accountable person appealed to the Tribunal, arguing that the shares should be valued at Rs. 137 per share, citing a decision of the Mysore High Court and the application of section 37 as a proviso to section 36(1) of the Act.
5. The Tribunal analyzed sections 36(1) and 37 of the Act, determining that section 37 is a proviso to section 36(1) and should be applied to value shares as if there were no restrictions on alienation.
6. Referring to a similar case decided by the Mysore High Court, the Tribunal upheld the accountable person's argument, directing the ACED to modify the assessment accordingly.
7. Ultimately, the Tribunal allowed the appeal, endorsing the valuation of shares at Rs. 137 per share as proposed by the accountable person.

This detailed analysis highlights the legal interpretation and application of relevant provisions in determining the valuation of unquoted shares under the Estate Duty Act, emphasizing the significance of precedent cases and statutory provisions in arriving at a just decision.