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[2007] 292 ITR 263 (DELHI) HIGH COURT OF DELHI Commissioner of Income-tax v. Rajiv Gupta MADAN B. LOKUR AND V.B. GUPTA, JJ. ITA NO. 296 OF 2007 MARCH 20, 2007 Section 4 of the Income-tax Act, 1961 - Charge of tax - Income - Chargeable as â–  For purposes of sub-clause (iv) valuation of shares by relying on rule 5 of Schedule II to Gift-tax Act was justified where such shares were not listed on stock exchange [Assessment year 1995-96] The assessee had purchased some shares of a company. The shares were not listed in the stock exchange. The face value of the shares was Rs. 10. The Assessing Officer was of the view that ones the break up value of the shares, the market price of the shares came to Rs. 16.40 and, therefore, the assessee had obtained a benefit of Rs. 6.40 per share which was considered as a perquisite. On appeal, the Commissioner (Appeals) relied on rule 5 of seemed scheduled to the Gift-tax Act for purpose of calculating track-up value of unquoted equity shares. The Tribunal upheld his order. Held that the Commissioner (Appeals) as well as the Tribunal had chosen to rely on rule 5 of Schedule II to the Gift-tax Act for arriving at the break-up value of the shares that were not quoted on the stock exchange. The admitted position was that there is no method of calculating the value of unquoted equity shares under the Income-tax Act. Thus, no fault could be found with the view taken by the Commissioner (Appeals) and the Tribunal. JUDGMENT The Revenue is aggrieved by a consolidated order dated July 14, 2006, passed by the Income-tax Appellate Tribunal, Delhi Bench "C", in a batch of appeals. We are concerned only with I.T.A. No. 1207/Del/99 relevant for the assessment year 1995-96 decided by the Tribunal. The assessee had purchased some shares of a company by the name of M/s. Metal Rod (Pvt.) Ltd. The shares were not listed in the stock exchange. The face value of the shares was Rs. 10. The Assessing Officer was of the view that on the break up value of the shares, the market price of the shares came to Rs. 16.40 and, therefore, the assessee had obtained a benefit of Rs. 6.40 per share which was considered as a perquisite. In coming to this…

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