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TMI Blog1982 (10) TMI 17X X X X Extracts X X X X X X X X Extracts X X X X ..... r, in view of the provisions of rule ID of the Wealth-tax Rules, 1957, there was material for the Appellate Tribunal to determine the value of unquoted equity shares at the value of Rs 73,265 ? (5) Whether, on the facts and circumstances of the case, the Appellate Tribunal was right in law in holding that in computing the shares of three lineal descendants of the deceased for rate purposes, the value of their shares in the house property known as Parvati Bhawan, Mandsaur, should be excluded in view of the provision of section 33(1)(n) read with sections 34 and 39 of the E.D. Act ? " The material facts giving rise to this reference as set out in the statement of the case are as follows: The deceased, Shyamsukha Garg, was a resident of Neemuch. He had his individual assets. He was also a partner in a trading firm, namely, M/s. Premsukh Shyamsukh, carrying on business in foodgrains and kirana goods on wholesale basis. The deceased had 1/3rd share in the said firm. The accountable person in the estate duty return of the deceased did not value the goodwill of the firm of which the deceased was a partner on the ground that the firm had no goodwill. The Asst. Controller of Estate Duty d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng out of the order of the Tribunal. Thus, questions Nos. 1 to 4 have been referred at the instance of the accountable person while question No. 5 has been referred at the instance of the Department. We have heard the learned counsel for the parties. Questions Nos. 1 to 3 : The learned counsel for the accountable person contended that the firm was carrying on wholesale business of the sale and purchase of foodgrains and other kirana goods and the nature of the business was such that it had no goodwill. However, it does not appear from the order oil the Tribunal that the contention in this form was raised before the Tribunal. The Tribunal took into account the relevant facts and found as a fact that the firm had a goodwill. As regards the basis of the valuation, the Tribunal considered the contention raised by the accountable person that some of the articles in which the firm dealt also resulted in loss and that there was a downward trend in the profits of the firm which had dwindled from Rs. 2,56,472 to only Rs. 42,723. The Tribunal taking all these facts into consideration held that two years' purchase in the present case would be a fair estimate of the goodwill of the firm. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llate Controller on a consideration of the said material computed the value of each share at Rs. 57 after deducting the loss from the share capital and making a further deduction of 25% for non-declaration of dividends for six years as per r. 1D of the W.T. Rules. No evidence to rebut the material placed by the accountable person was produced by the Department before the Appellate Controller. In the circumstances, it could not be said that the Appellate Controller committed any error of law in determining the value of the unquoted equity shares. The learned counsel for the Department contended that the Appellate Controller committed an error of law in applying the principles of r. ID of the W.T. Rules in valuing the equity shares. According to him the rules framed under another Act should not have been considered by the Appellate Controller in computing the valuation of the shares under the provisions of the E.D. Act. This contention is not well founded. It is not disputed that no rules have been framed for valuing the unquoted equity shares under the E.D. Act. In the circumstances, in the absence of any contrary provision, the principles laid down by the statutory Rules framed u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ue of the house because the whole of it does not exceed Rs. 1 lakh. In fact the value of this house is material only for the purpose of determining the share of the lineal descendants of the deceased, because otherwise the share of the deceased is altogether exempt. This part of his contention is correct. Therefore, the share of three lineal descendants of the deceased in this behalf shall also be excluded from the total computation in view of s. 33(1)(n) read with s. 34 of the E.D. Act. " The reasoning employed by the Appellate Tribunal is not intelligible and is contrary to the provisions of s. 33(1)(n) read with s. 34(l)(c) of the Act. As per s. 33(1)(n) of the Act no estate duty is payable on the share of the deceased in one house or part thereof exclusively used by the deceased for his residence to the extent the principal value thereof does not exceed rupees one lakh if such house is situate in a place with a population exceeding ten thousand, and the full principal value thereof, in any other case. Section 34 of the Act provides for aggregation for the purpose of determining the rate of estate duty to be paid on any property passing on the death of the deceased. Under sub ..... X X X X Extracts X X X X X X X X Extracts X X X X
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