Law:

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Section 7, read with rule 9 of Schedule III to the Wealth-tax Act, 1957 - Valuation of assets - Shares - Assessment year 1989-90 - Whether where shares held by assessee were quoted on recognized stock exchange, they had necessarily to be valued at such quotation and no deduction could be granted by taking average of book value and quotation of stock exchange - Held, yes FACTS The assessee was holding shares in a company. The assessee claimed for valuation of shares at the book value on the ground that he had given an undertaking to the Industrial Credit and Investment Corpn. of India Ltd. that he would not dispose of the shares so long as any money remained outstanding to the said corporation. However, the Assessing Officer valued said shares at the value at which the share was traded on the stock exchange as on the valuation date. The assessee's appeal proved unsuccessful. On second appeal, the Tribunal held that the share was to be valued at the average of the book value and the value as per the quotation on the stock market. On reference : HELD The only mode of the valuation of those shares was the rate quoted at the exchange. No deduction therefrom is provided for in the rules and no deduction could have been granted by the Tribunal by taking the average of the book value and the quotation of the stock exchange for those shares. [Para 6] Moreover, what is taxed under the Act is the net wealth as on the valuation date. The transferability or otherwise of that wealth during that year is not of material significance. If an asset is required to be valued in the manner provided in the statute, it has necessarily to be valued by adopting that mode and no other. If the statute does not provide for any deduction therefrom, no such deduction could be allowed by the Tribunal. The question referred was, therefore, answered in favour of the revenue. [Para 7] Mrs. Pushya Sitharaman for the Applicant. JUDGMENT R. Jayasimha Babu, J. - The question referred to us at the instance of the revenue is,- "Whether on the facts and in the circumstances of the case, the Tribunal was right in law and had valid materials in holding that the market value of the shares held by the…

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