Law:

Section:

Section 7 of the Wealth-tax Act, read with rule 1A of the Wealth-tax Rules, 1957 - Valuation of assets - Unquoted equity shares - Assessment year 1985-86 - Assessee declared value of shares in question, as nil whereas WTO found that these shares were listed in Madras Stock Exchange and adopted quoted rate - Whether Tribunal was right in law in relying on non-existing sub-rule (ka) and treating said shares of company as unquoted on relevant valuation date for assessment year in question - Held, no [Matter remanded back] T. Ravikumar for the Applicant. JUDGMENT N.V. Balasubramanian, J. - In pursuance of the directions of this Court, the Income Tax Appellate Tribunal has stated a case and referred the following questions of law for our consideration :- "1. Whether on the facts and in the circumstances of the case, the Appellate Tribunal was right in law in treating the shares of M/s. Pondicherry Papers Ltd., as unquoted on the valuation date relevant for the assessment year 1985-86 ? 2. Whether on the facts and in the circumstances of the case, the Appellate Tribunal was right in law in directing that the shares of the aforesaid company must be valued on yield basis when the assessee himself had sold 15,000 shares of the said company on 10-4-1984 at the rate of Rs. 10 per share as against the quoted value of Rs. 10.75 per share ?" 2. The assessment year involved in 1985-86. The assessee owned certain shares in M/s Pondicherry Papers Limited and the assessee filed the return under the Wealth Tax Act, 1957 for the assessment year 1985-86 admitting the net wealth of Rs. 4,24,300. As far as the shares owned by the assessee in M/s. Pondicherry Papers Ltd. is concerned, the assessee has declared the value of the share as 'Nil'. However, the Wealth Tax Officer found that the shares in M/s. Pondicherry Papers Limited were listed in Madras Stock Exchange and he valued the shares at the price quoted in Stock Exchange, namely, Rs. 10.75 per share. The Commissioner of Income Tax (Appeals-I), Madurai, on appeal allowed the appeal preferred by the assessee on the ground that the shares though quoted in Madras Stock Exchange and the Certificate from Madras Stock Exchange re-…

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