Law:

Section:

section 4(1)(a)(i ) of the wealth-tax act, 1957-deemed wealth-assessee held shares in a company which he valued on his own in his wealth-tax assessment at rs. 6,378 per share and this valuation was treated as fair-however, he sold 10 shares of same company in same assessment year at rs. 3,250 per share to his wife-whether these 10 shares were transferred at inadequate consideration so as to attract section 4(1)(a)(i) and difference between rs. 3,250 and rs. 6,378 per share had to be added to net wealth of assessee-held, on facts, yes Facts In the assessment for the assessment year 1966-67, the assessee showed the value of shares held by him in a company at Rs. 6,378 per share and this valuation was treated as fair by the Tribu- nal. During the same assessment year the assessee had transferred 10 shares of the said company at Rs. 3,250 per share to his wife. The WTO found that these shares were valued at the rate of Rs. 8,739 in the assessment order for the assessment year 1965-66. He, therefore, came to the conclusion that the shares were not transferred for adequate consideration. He valued the shares at Rs. 8,666.58 per share and, accordingly, included the value of the 10 shares in the net wealth of the assessee under section 4(1)(a)( i). On appeal against such inclu- sion under section 4(1)(a)( i), the AAC gave some relief to the assessee. On second appeal, the Tribunal deleted the addition made under section 4(1)(a)( i) following its decision in the income- tax appeal of the assessee for the assessment year 1966-67 wherein it had held applying the yield-method that the shares were transferred for adequate consideration and so section 64(1)(iii) was not applicable. On reference: Held It was undisputed that in the wealth-tax assessment for the assessment year 1966-67 the assessee himself showed the value at Rs. 6,378 per share and this valuation was treated as fair. As on the very finding of the Tribunal in the assessee's wealth-tax assessment for 1966-67, the valuation of shares had been taken at Rs. 6,378 per share, it did not stand to reason as to how far the ten shares of the same company transferred by the assessee to his wife a different valuation could…

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