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TMI BlogValuation of enquoted equity shares of investment companies and holding companies-Instruction regardingX X X X Extracts X X X X X X X X Extracts X X X X ..... 0-67 ([1973] 92 ITR (St.) 2) for valuation of unquoted equity shares- (i) of investment companies other than those which are substantially holding companies; (ii) of investment companies which are substantially holding companies; and (2) Board's Circular No. 118 dated 15-9-73 ([1973] 92 ITR (St.) 1) (in partial modification of Circular dated 31-10-67*) for valuation of unquoted equity ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shares based on the book value of the assets and liabilities disclosed in the balance-sheet; and (b) the capitalised value arrived at by applying certain rate of yield of the maintainable profits, has to be discarded. (ii) In the case of a company which is a going concern and whose shares are not quoted on the stock exchange, the profits which the company has been making and should be capab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he break-up value method will depend upon the facts and circumstances of the case. One of the cases of exceptional circumstances referred to in (iii) above can be where the assets of the company comprise wholly or mainly of jewellery, precious stones, etc., and the company carries on business of hiring out such assets. In such a case, if the income from hiring out of jewellery, gold ornaments, etc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt allowance, in case it is debited in the books of account, will be added back. (v) The appropriate tax liability of the company on the book profits so determined will be deducted. (vi) The profits required for paying dividends on shares with prior rights, i.e., preference shares, shall be excluded. (vii) The average of the company's books profits, as adjusted above will be determined. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ubsidiary or subsidiaries were, in fact, one single company, on the same lines as laid down in Circular dated 15-9-73. The rates of yield to be applied would be 10% and 8.5% as mentioned in para. 4 above. 7. The above may please be brought to the notice of all the assessing officers in your charge. These instructions will apply to all pending assessments and will hold the ground until rules for ..... X X X X Extracts X X X X X X X X Extracts X X X X
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