9911796707
TMI Blog1985 (11) TMI 92X X X X Extracts X X X X X X X X Extracts X X X X ..... (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 balance of the assessee with Arvind construction Co. (P.) Ltd.; and (e) claim of exemption under section 5(1)(i) of the Wealth-tax Act, 1957 ('the Act'). The assessment was completed by the learned IAC (Assessment) vide order dated26-2-1982. The learned Commissioner of Income-tax, Delhi-II, New Delhi, 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 (Assessment) was not only erroneous, but also prejudicial to the interest of the revenue. His reasoning be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... so valuation of the said shares on yield basis has 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 sized 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 Smt. 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 of Wealth-tax 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct, i.e., he is to determine 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 d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re the two dates do not coincide then the applicability of rule 1D would be directory and not mandatory. 5. Now on the facts of the present assessee's case, the subject-matter of action by the learned Commissioner under section 25(2) is the shares of: (i) Mahavir Export Import Co. (P.) Ltd.; and (ii) Arvind construction Co. (P.) Ltd. The valuation date of the assessee relevant for the assessment year under appeal and as it revealed by the assessment order is31-3-1977while the accounting periods of Mahavir Export Import Co. (P.) Ltd. ended on31-3-1977and that of Arvind Construction Co. (P.) Ltd. on31-12-1976. So in the case of the shares held by the assessee in Arvind Construction Co. (P.) Ltd., rule 1D is directory and not manda ..... X X X X Extracts X X X X X X X X Extracts X X X X
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