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2012 (10) TMI 69 - HC - Wealth-taxValuation of shares under Wealth Tax – Assessee contended that the value should be taken as nil, considering the restriction on free marketability due to lock in period under promoter quota - AO pointed that shares of the company were quoted shares and arrived at the market value of Rs. 210/- as on the valuation date – Following the decision in case of R. Rathinasabapathy Chettiar (1973 (5) TMI 8 - MADRAS HIGH COURT) lock-in period on the shares held out of the promoters' quota, necessarily one has to arrive at the depreciated value of these shares. Since these shares, in reality, would not fetch the same amount of price as the shares enjoying easy transferability, the shares could not be treated on par more or less with the shares which can be dealt with easily or saleable readily. What could be the depreciated value of a promoters' quota shares suffering restriction on free transferability Rule 11 or Rule 21 – Held that:- In absence of any such guideline, the depreciation may range from 0 to 100 and it is always a question of debate. By adopting the principle as given under Rule 11, we are neither treating the shares as unquoted shares, nor are we ignoring the fact that the company's shares are quoted shares. Though the assessee is not in a position to show what could be the depreciated value of the restriction on the transfer, even invoking Rule 21, as had been done by the Revenue, we find that Rule 11 could only be a plausible method to arrive at the depreciated value of a quoted share, which suffers a lock-in period, by reason of it being allotted as a promoters' quota. Appeal decides in favour of revenue & case remand back to AO
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