Law:

Section:

Section 48 of the Income-tax Act, 1961 - Capital gains - Computation of - Assessment year 1969-70 - Assessee transferred shares of 'J' company and 'K' company at Rs. 69.17 and Rs. 14.74 respectively - AAC, on basis of Tribunal's decisions in a connected cases in wealth-tax proceedings, directed to adopt their value at Rs. 63.17 and 17.69 - Tribunal affirmed order of AAC - Whether since value of shares of 'J' company declared by assessee was higher than value determined by AAC and Tribunal, value declared by assessee should be adopted - Held, yes - Whether since valuation of shares of 'K' company determined in wealth-tax proceedings of connected case was higher than valuation declared by assessee, higher value as per order of AAC should be adopted - Held, yes FACTS In the return for the assessment year, in question the assessee declared capital gains of Rs. 14,621 arising from the transfer of 1,440 shares of 'J' company and 100 shares of 'K' company by the assessee to other persons. The assessee stated that these shares were transferred at the rate of Rs. 69.17 and Rs. 14.74 per share,. The ITO held that since the vendoees were directly and indirectly connected with the assessee and also because the market value of the said shares, according to the breakup value method, was much higher, he estimated the value of the said shares was at Rs. 101.79 and Rs. 17. 63, respectively, under section 52. The AAC held that they should be valued at Rs. 63.17 and Rs. 17.69, respectively, in accordance with the orders of the two Tribunals in wealth-tax appeals filed by a connected assessee. The Tribunal affirmed the order of the AAC. On reference: HELD So far as shares of 'J' company were concerned, the assessee's valuation was higher than the valuation determined in the wealth-tax appeals aforesaid. In such a situation, the proper course was to accept the valuation of the assessee. So far as the shares of 'K.' company were concerned, the valuation determined in the wealth-tax proceedings of the connected case was higher than the valuation disclosed by the assessee. In such a case, the higher valuation determined in the wealth-tax proceedings would be adopted according to the…

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