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TMI Blog2010 (8) TMI 74X X X X Extracts X X X X X X X X Extracts X X X X ..... lowing two questions are referred by the Tribunal in compliance with the directions of this court contained in orders dated July 8, 1991 under section 256(2) of the Act : "1. Whether the hon'ble Income-tax Appellate Tribunal was right in law in deleting the addition of Rs. 4,20,000 made by the Assessing Officer on account of capital gains on transfer of 3,500 equity shares of M/s. Rentiers and Fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ers (P) Ltd. of the face value of Rs. 800 each to his family members at Rs. 110 per share through entries effected in their respective accounts with M/s. Riviera Apartments Pvt. Ltd. The Income-tax Officer estimated the sale consideration of these shares at Rs. 230 per share. By applying the provisions of section 52 of the Income-tax Act, the Assessing Officer computed the capital gain at Rs. 4,20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gh [1982] 136 ITR 645, held that there was no scope either in law or on facts to compute the capital gain at Rs. 4,20,000 on the transfer of capital shares instead of Rs. 35,000 shown by the assessee. 6. We have perused the judgment of the Supreme Court in K. P. Varghese v. ITO [1981] 131 ITR 597. That was also a case involving interpretation of section 52 of the Act. The Supreme Court has catego ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rules, which could not be the basis of valuing the share of an ongoing concern 7. As per the judgment of the Supreme Court in CWT v. Mahadeo Jalan [1972] 86 ITR 621, it has come on record that no dividend was declared in respect of those shares in the earlier years. If one were to adopt the yield method or the dividend method, the valuation of the shares would have been much less than the figure ..... X X X X Extracts X X X X X X X X Extracts X X X X
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