Law:

Section:

Section 7, read with section 24(6) of the Wealth-tax Act, 1957 - Valuation of assets - Shares - Assessment year 1962-63 - Assessee held shares of certain company - WTO enhanced break-up value of company's shares by taking into account market value of shares held by said company in one 'A' company - On appeal Tribunal took view that section 7(2)(a) had no application and it adopted unanimous valuation report of two valuers as done in gift tax matter which was produced before it by assessee - On reference, assessee contended valuation of shares was to be made in accordance with Circular No. 3 (W.T.) of 1957 dated 28-9-1957, issued by Central Board of Revenue - Whether since directions contained in circular were only empowering provisions and did not contain mandatory orders or directions, it was always open to taxing authorities either to follow same or not depending upon facts and circumstances of case - Held, yes - Whether section 7(2) contemplates valuation of individual assets held by assessee like an individual - Held, no - Whether valuation of shares of a company which are not quoted on the stock exchange has to be determined, in accordance with provision of section 7(1) and on basis of price which, in opinion of WTO, they would fetch if sold in open market on valuation date - Held, yes - Whether in view of unanimous valuation report of two valuers which was produced before Tribunal, Tribunal was fully justified in valuing shares in conformity with valuation made by valuers - Held, yes Circulars and Notifications : Circular No. 3(W.T.) of 1957 dated 28-9-1957 FACTS The assessee, held 1,446 shares of certain company. The WTO enhanced the break-up value of the company's shares by taking into account the market value of the shares held by the said company in 'A' company. On appeal the AAC confirmed the order of the WTO on a second appeal, the Tribunal took the view that section 7(2)(a) had no application to the facts of the case. During the last stages of the hearing, the assessee placed before the Tribunal unanimous valuation report of two valuers as done in a gift-tax matter. The Tribunal adopted said valuation. On reference, the assessee contended that…

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