9911796707
TMI Blog1995 (1) TMI 55X X X X Extracts X X X X X X X X Extracts X X X X ..... l. We have not been able to know how in the instant case, the third question of law referred to us, i.e., whether the Appellate Tribunal was right in holding that the break-up value of the shares should be discounted by 30 per cent. because of the restrictions contained in the memorandum and articles of association of the company in the matter of alienation of shares, has arisen. But we see reason for a reference of the second question whether, the Appellate Tribunal was right in holding that the balance-sheet as at March 31, 1970, and not as at March 31, 1971, should be taken into account for determining the value of the shares gifted on March 22, 1971, and the reason why the first question whether, on the facts and in the circumstances of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orated in Schedule II of the Gift-tax Act which says that value of gifted property has to be determined in accordance with the provisions of Schedule III to the Wealth-tax Act subject to the modifications stated therein. Rules as to unquoted equity shares in companies other than the investment companies which alone has to be applied under the Wealth-tax Act, give a procedure which has been indicated in two earlier judgments of this court in CGT v. K. Ramesh [1983] 141 ITR 462 and CGT v. Venu Srinivasan [1985] 156 ITR 679. In the latter judgment, this court has stated as follows : " The question for consideration is about the valuation of unquoted shares of a private company. The valuation in such cases is done by following the break-up va ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... prescribing the manner in which a particular property has to be valued, the authorities under the Act have to follow it. They cannot devise their own way and means for valuing the assets. It is reiterated and emphasised that merely because the valuation date of the assessee and the date with reference to which the balance-sheet of the company is drawn up do not coincide, it cannot be said that rule 1D is not mandatory or that it need not be followed. The break-up method contained in rule 1D takes the balance-sheet of the company as the basis for working the rule. That rule cannot be worked in the absence of the balance-sheet. But there may be cases where the date of the balance-sheet and the valuation date of the assessee do not coincide. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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