9911796707
TMI Blog1985 (11) TMI 91X X X X Extracts X X X X X X X X Extracts X X X X ..... eport : (b) Revision of value of shares as per the Supreme Court decision in the case of CGT v. Smt. Kusumben D. Mahadevia [1980] 122 ITR 38 ; (c) Revision of value of jewellery ; (d) Taking of correct balances of the assessee with Arvind Construction Co. (P.) Ltd. ; and (e) Claim of exemption under section 5(1A) of the Wealth-tax Act, 1957 ('the Act'). The assessment was completed by the learned IAC (Assessment) vide orders dated26-2-1982. The learned Commissioner, in an action under section 25(2) of the Act, set aside the assessment since he was satisfied that the assessment framed by the learned IAC was not only erroneous, but also prejudicial to the interests of the revenue. His reasoning being that the shares held by the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... luation of the said shares on yield basis have also been placed on our file in the assessee's paper book. 3. In the case of Sharbati Devi Jhalani, the Hon'ble High Court was seized of an identical issue, since there also the assessee had valued the share supported by a registered valuer's report in tune with the decision of the Hon'ble Supreme Court in the cases of Kusumben D. Mahadevia and Mahadeo Jalan. There also, on identical facts with the same set of circumstances, an action under section 25(2) was resorted to by the learned Commissioner and the said order was the subject-matter of civil writs. The Hon'ble Delhi High Court held as under : " We are of the opinion that where the valuation date of the company and of the assessee is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... termine the price which those shares will fetch if sold in the open market on the valuation date. It is obvious that the Valuation Officer is not to determine the value of unquoted shares by applying the break-up value method. The correct method in valuing such shares would be the method as approved by the Supreme Court in CWT v. Mahadeo Jalan [1972] 86 ITR 621 and CGT v. Smt. Kusumben D. Mahadevia [1980] 122 ITR 38, which is by applying the yield method. The break-up method is to be used only if the company, on the valuation date, is ripe for winding up. " Their Lordships concludingly held that--- " In the instant case the valuation date of the petitioner and the last date of the accounting period of the company were different. Therefo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d company was ripe for winding up and accordingly giving due consideration to the totality of the circumstances and following with respect the ratio laid down by the Hon'ble Delhi High Court in the case of Sharbati Devi Jhalani we have to hold that the assessee having valued the shares in accordance with as such, can be summarised as under : (i) That the question about valuation of unquoted shares has to be dealt with by the WTO for determination of the valuation in accordance with the provisions of section 7(1) read with rule 1D, if applicable. He has to determine break-up value of the shares in the manner laid down in rule 1D and if the value so determined is more than the value returned and the provisions of rule 3B of the Rules are ap ..... X X X X Extracts X X X X X X X X Extracts X X X X
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