1982 (3) TMI 36

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..... March 31, 1975, when the balance-sheet as on December 31, 1974, already exists and thereby contravening the provisions of Explanation I of rule ID of the Wealth-tax Rules, 1957 ? " This question is the only question raised in this application, but there are a, number of other applications where this question is raised along with some other questions, the Tribunal's main judgment being in this case, the order in this case will also have effect on the other cases concerning this particular question. The facts of the case are that the assessee acquired 1,000 shares of M/s. Fedders Lloyd Corporation (Private) Ltd., of a face value of Rs. 100 each on 29th March, 1975. This was part of a fresh issue of share capital. The valuation date for .....

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..... uestion states a method for determining the market value of unquoted equity shares. There being no market price, the value has to be determined from the balance-sheet of the company. The rule elaborately deals with the method by which the value of a particular share is to be determined from the balance-sheet. It so happens that the rule contemplates by Expln. I that a reference should be made to the balance-sheet as drawn up on the valuation date which would mean 31st March, 1975 ; it further provides that if there is no such balance-sheet then the immediately preceding balance-sheet is to be examined, and if neither of these exist, then a later balance-sheet is to be examined, i. e., the one for the succeeding year. In this case, the co .....

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..... ee might have urged that the rule does not apply, and hence, even the balancesheet of 31st December, 1975, is not to be applied, but the assessee has not sought any reference, so we need not examine the question whether any other method of evaluation is to be used in this case. We agree with the Tribunal that no question of law arises, in the circumstances of this case, concerning the application of the balance-sheet of 31st December, 1974, and this is a question of fact. It may here be mentioned that the Rules are only meant to provide a convenient method of evaluating the market value of shares which are not normally sold or bought. The rule in order to be applied in the circumstances of the present case requires the valuation to be .....

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