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TMI Blog1987 (3) TMI 143X X X X Extracts X X X X X X X X Extracts X X X X ..... td. The accountable person made valuation in accordance with the provisions of Rule 1D of Wealth-tax Rules, 1957 at Rs. 222 per share. In the course of assessment, he submitted computation made on yield basis under which value came to Rs. 48.34 per share. The Assistant Controller of Estate Duty made valuation by adopting general break-up method. In that process, he did not accept the value shown in the balance sheet of the company as value of the assets. He took higher value in the computation. Besides, said company held shares in other private company. He proceeded to determine market value of shares of said other company which came to a higher figure than shown in the balance sheet of the company with which we are concerned. On this basis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arded. This statutory provision cannot be ignored. In view of this specific special provision for valuation of shares of private company, those shares are bound to be valued with reference to the value of the total assets of the company. This is the primary method prescribed by the statute. It is only when the value is not ascertainable by recourse to that method, that the question of adopting some other method would arise. Now, valuation with reference to the value of the total assets of the company is valuation by break-up method. The Estate Duty Act does not prescribe rules for computing value by break-up method. However, Wealth-tax Rules, 1957 contain a rule in which break-up method is prescribed. That rule is Rule 1D. That rule is a st ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... liquidation and when the fluctuations in the profits are not such as to prevent reasonable estimation of profit-earning capacity. These two decisions are CWT v. Mahadeo Jalan [1972] 86 ITR 621 and CGT v. Smt. Kusumben D. Mahadevia [1980] 122 ITR 38 which were cited before us by the learned representative of the assessee. The first decision was under the Wealth-tax Act and the other under the Gift-tax Act. In the second decision, the Supreme Court made it clear that they had not considered effect of Rule 10(2) of Gift-tax Rules as that aspect did not arise out of the question as framed. These decisions do not lay down that even when there is obligatory statutory provision to adopt method with reference to value of assets that method should ..... X X X X Extracts X X X X X X X X Extracts X X X X
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