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TMI Blog1986 (10) TMI 50X X X X Extracts X X X X X X X X Extracts X X X X ..... re are no rules prescribed under ED. Act, for valuing the unquoted shares, he would be justifies in valuing the same on the basis of the WT Rules for the Estate Duty purpose also in this connection reliance was placed on the decision of the Hon'ble Mysore High Court in the case of CED vs. J. Krishna murthy (1974) 96 ITR 87 (Mys) The ACED, however, was of the view that since there was restriction in alienation of the shares of Sigil (India) Services Pvt. Ltd., its valuation has to be done as per the provisions of s. 37 of the Act. The ACED also rejected the contention of the accountable person that even assuming for the sake of arguments that the provisions of s. 37 of the Act were applicable in the instant case, then available balance-sheet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e view that the ACED was fully justifies in obtaining the figures of assets and liabilities as on the date of death i.e. 24th March, 1969. Hover as regards the quantum, the Controller (Appeals) had given certain relief to accountable person and we have been told that after giving effect to the said relief the value of the shares in question would work out to Rs. 160 per share (approximately). 4. Being aggrieved by the order of the Controller (A) the accountable person has come up in appeal before the Tribunal. The ld. counsel for the accountable person reiterated the submissions which were made before the ED authorities and strongly argued that the Controller (A) ought to have accepted the value of the shares at Rs. 137 per share as work ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T Rules. 1958 He, therefore urged that we should uphold the order of the controller (A). 5. We have carefully considered the rival submissions of the parties and we find considerable force in the submissions made on behalf of the accountable person. At this stage, it would be necessary for us to refer to ss. 36 (1) and 37 of the Act 36.1 The principle value of any property shall be estimated to be the price which in the opinion of the controller, it would fetch if sold in the open market of the time of the deceased's death. 37. Where the articles of association of private company contain restrictive provision as the alienation of shares. The value of the shares if not ascertainable by reference to the value of the total assets of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ue for the purposes of estate duty, the Asstt. controller of Estate Duty took into consideration the value of the net assets of the company on the basis of its balance sheet as on Dec., 31, 1966 the estimated value of goodwill and the expected dividend for the year 1967 and fixed the value of a share at Rs. 196.50 On the yield basis. He computed the value at Rs. 178.57 averaging the two values he fixed the value of the shares at Rs. 151.41 a share. On appeal, the Appellate Controller held that the correct market value of the shares should have been ascertained with reference to the balance sheet of the company as on Dec., 31 1667 and after allowing 15 percent discount as provided under rule 1D of the Wealth tax rules 1957 he valued a share ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of rules valuation for the purposes of the Act has to be made in accordance with well recognized methods of valuation followed in India the method of valuation prescribed by rule 1D of the WT Rules 1957 being the only statutorily recognized method of valuation of unquoted equity shares in this country, it would not be wrong to adopt that method for valuation purpose of estate duty also. The rule can be looked into for the purposes of knowing the manner of break up method of valuation. The shares held by the deceased had been valued at Rs. 1,69,020 under the WT Act Since under both the Acts it is the price the shares would fetch if sold in the open market that has to be determined, the method of valuation of principle of valuation under bot ..... X X X X Extracts X X X X X X X X Extracts X X X X
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