TMI Blog1982 (3) TMI 139X X X X Extracts X X X X X X X X Extracts X X X X ..... l value was shown at Rs. 6,72,000. Later on, along with a letter dated14-9-1977, the assessee filed a revised return of net wealth. In this return, firstly the value of 780 shares of Atul Glass Industries (P.) Ltd. was excluded on the ground that these shares were given over to Smt. Shant Duggal by virtue of a probate issued in her favour. Secondly, the value of the remaining 2,580 shares was taken at Rs. 226 per share. This valuation was adopted on the basis of the order of the Assistant Controller in the case of late Shri F.C. Duggal, wherein the value of each share of Atul Glass Industries as on16-11-1975was taken at Rs. 226 per share. The WTO was of the view that the exclusion of 780 shares of the company could not be permitted as the o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... decision of the Bombay High Court in Smt. Kusumben D. Mahadevia v. CWT [1980] 124 ITR 799. On the question of valuation, the AAC while agreeing with the assessee that since the company is a growing concern and is not ripe for winding up, the break-up method would not be applicable, at the same time observed that the correct market value of the shares could not be arrived at by the yield method. He was, therefore, of the opinion that the method adopted by the Assistant Controller in the case of late Shri F.C. Duggal, valuing the shares at Rs. 226.29 per share, was the correct method and the value of the shares should be determined on that basis. With regard to the exclusion of the 780 shares, the AAC observed that the mere issue of the prob ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... valuing the shares at Rs. 226.29 per share was not correct. According to the learned counsel, the AAC, although clearly holding that the break-up method was not applicable, has not given a clear finding that the yield method is the only method which could be applied in this case and if the yield method is applied, the value of each share works out to Rs. 50.30 per share as against Rs. 226.29 per share adopted by the AAC. The learned counsel, further, submitted that even if the assessee had returned a higher value due to a certain misconception of the correct legal position, the appellate authority should have adopted the correct value. In pressing home his point of view, the learned counsel referred to the decision of the Bombay High Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lied. In taking the above view, their Lordships affirmed their earlier decision in CWT v. Sripat Singhania [1978] 112 ITR 363. Apart from the above decision, we find that the question whether rule 1D is directory or mandatory has been discussed at length by the Special Bench of the Appellate Tribunal, Delhi Bench, in the case of Biju Patnaik. In their order, it has been clearly held that the said rule is mandatory. In view of the above authorities, we are of the opinion that the AAC was not justified in taking the view that the breakup method as per rule 1D is not applicable in respect of the shares of Atul Glass Industries (P.) Ltd., since it was a case of a running business. 8. Coming now to the authorities cited by the learned counsel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w is contrary to the view taken by the Allahabad High Court in Padampat Singhania. We would, however, prefer to follow the view taken by the Allahabad High Court since the said view is in conformity with the decision of the Special Bench of the Appellate Tribunal,Delhi, in the case of Biju Patnaik. We are, therefore, of the opinion that the WTO was justified in valuing the shares of Atul Glass Industries (P.) Ltd. held by the assessee on the basis of the break-up method as per rule 1D. In this view of the matter, we allow the appeal filed by the department and reject the appeal filed by the assessee on this point. The order of the AAC to this extent is reversed and the order of the WTO is restored. 10. Coming now to the next ground taken ..... X X X X Extracts X X X X X X X X Extracts X X X X
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