Law:

Section:

Section 36 of the Estate Duty Act, 1953 - Valuation of estate - Whether, as regards valuation of shares, normally market price quoted in stock exchange on date of death of deceased should be taken as correct value unless there was material to show that there existed any person desirous of purchasing bulk of shares held by deceased at a higher price with a view to gain control of company's affairs - Held, yes - Whether managing agency being a business and not purely a contract of personal service would be property and should be taken into account in valuing estate of deceased - Held, yes - Whether, however, value of managing agency had to be determined taking into account provisions of Companies Act and terms of contract as on date of death of deceased - Held, yes FACTS The deceased was a shareholder in 'J' company and was also holding managing agency rights in a firm. The ACE valued the share of deceased at Rs. 140 against market quotation of Rs. 87 per share. He also valued the managing agency rights at Rs. 10 lakhs and fixed the deceased's ¼th share at Rs. 2.50 lakhs. The accountable persons case was that the market value of share quoted in stock exchange should be taken as proper value for valuing shares and that the managing agency had no market value and thus it could not be taken into account in valuing the estate of the deceased. The Board, however, reduced the value of the shares from Rs. 140 to Rs. 110 per share taking into account the fact that the shares had a special appeal for buyer who was engendered by the prospects of acquiring control over the mills and as such the stock exchange quotation might not reflect the true value of the shares. As regards the managing agency rights, the Board held that the deceased's share in the managing agency rights was a valuable property and it being one of the assets left by the deceased could not be left out of account. It, however, reduced the value of the managing agency rights from Rs. 10 lakhs to Rs. 6 lakhs. On reference : HELD Firstly, in view of decision of the Supreme Court in J.K. Trust, Bombay v. CIT [1957] 32 ITR 535 , the accountable person's contention that the managing agency was a contract of…

Deprecated: trim(): Passing null to parameter #1 ($string) of type string is deprecated in /home/digixyei/sldsystempk.com/view/master-layout/view_case.php on line 492