Law:

Section:

Section 7 of the Wealth tax Act, 1957, read with rule 1D of the Wealth-tax Rules, 1957 - Valuation of assets - Shares - Assessment years 1975-76 and 1976-77 - WTO valued unquoted shares of assessee as per rule 1D - Tribunal after taking into account value as determined by WTO found that there was variations in value as quoted on stock exchange a few months after relevant date - Further, value indicated in transfers of shares as registered in books of assessee was considerably less than market value arrived at by WTO - Whether on above findings, Tribunal was justified in holding that value given by assessee, which was a little higher than value quoted by stock exchange a few months after relevant date, was reasonable - Held, yes FACTS The assessee owned certain shares in two companies. The WTO did not accept the value of the shares as furnished by the assessee and proceeded to determine the market value on the basis of rule 1D and valued the shares accordingly. The assessee's appeal before the AAC failed. On further appeal, the Tribunal held that the estimate of the market value by the WTO even under rule 1D was excessive and that the value given by the assessee, which was a little higher than the value quoted by the Stock Exchange a few months after the relevant date, could be taken as a reasonable value. On reference: HELD The Tribunal after taking into account the value of the shares as determined by the WTO by applying rule 1D found that there was a variation in the value as quoted on the stock exchange. The Tribunal also took note of the fact that even though the shares were not quoted on the stock exchange prior to March 1977, there had been transactions in shares as registered in the books of the company and the value indicated in those transfers was considerably less than the market value arrived at by the WTO and, therefore, the value quoted by the assessee could be taken as fairly representing the market value of the shares. In view of the said finding rendered by the Tribunal, there was no reference justified in the instant case. Note: The case was decided against the revenue. J. Jayaraman for the Petitioner. P.P.S. Janardhana Rajah for the…

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