Appointment of valuation officers of shares, stocks etc., u/s.12 A of the Wealth-tax Act, 1957. - Income Tax - 1177/CBDT

INSTRUCTION NO. 1177/CBDT Dated : May 20, 1978 Section(s) Referred: 55 of Income Tax Act , 15 of Gift Tax Act , 12A and 16A of WT Act Statute: Wealth Tax Act, 1957 The Board have appointed a number of valuation officers of shares, stocks etc., u/s.12 A of the Wealth-tax Act, 1957 in every charge. References are made to these valuation officers under the provisions of sec.16 A of the wealth-tax Act,1957/sec.15(6) of the Gift-tax Act, 1958/sec.55A of the I.T.Act for the purpose of determining the fair market value of unquoted shares of companies. 2. The point at issue is whether the value of the unquoted equity shares of a company as determined u/s.16 A of the Wealth-tax Act by the valuation officer in the case of one shareholder of a company, should as a matter of administrative policy be uniformly adopted by the Department in the assessments of other share-holders of the same company in respect of the same valuation officer u/s.16 A of the Wealth-tax Act in each case. This question would normally arise only where the assessee himself seeks such uniformity in valuation. If the assessee were to object to the adoption in his case, the Department by the valuation officer in another case, the department will, of course, be bound to make a fresh reference for valuation to the valuation officer. 3. The matter has been considered by the Board. While the Board do feel that the fresh valuation in the case of each assessee would entail multiplicity of proceedings and litigation and avoidable delays in finalisation of assessments they are also conscious of the fact that the interests of revenue could be jeopardised to a great extent if the valuation made by the valuation officer in a particular case has not been made on a sound and realistic basis. In short, though it is desirable to adopt the same value in respect of different shareholders of the same company, it may not be possible to issue administrative instructions to this effect simpliciter. 4. Having considered the various aspects of the matter the Board desire that the following procedure should be followed in this regard: Whenever valuation of shares of a company falling in the jurisdiction of a CIT has been made by a valuation officer he should apply his mind as to the correctness/fairness of such valuation and if he is satisfied about the same, he should circulate the same not only amongst all the officers of his charge but also to other CsIT for being followed, wherever necessary in respect of other shareholders.