TMI Blog2001 (6) TMI 59X X X X Extracts X X X X X X X X Extracts X X X X ..... said company as on March 31, 1978, and not to the balance-sheet as on March 31, 1979?" The relevant facts may be briefly noticed. On March 20, 1979, the assessee sold 250 shares of Kakkar Steel Complex (P.) Ltd. to Naval Kumar and Vipan Kumar for a consideration of Rs. 2,50,000. Each share had a face value of Rs. 1,000. The Inspecting Assistant Commissioner vide his assessment order dated March 5, 1983, held that "the market value of the shares even if worked out with yield method would not be less than Rs. 2,199 per share." Thus, she came to the conclusion that the shares had been "transferred for a consideration, which is much below the market value." As a result, she held that "gift-tax under section 4(1)(a) is attracted." Thus, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urt. Shri Sawhney, learned counsel for the Revenue, has vehemently contended that the view taken by the Tribunal is erroneous. The Assessing Officer had rightly determined the value of the shares on the basis of the balance-sheet as on March 31, 1979. No one has put in appearance on behalf of the assessee. Section 4 of the Gift-tax Act, 1958, inter alia, provides that "where property is transferred otherwise than for adequate consideration, the amount by which the value of the property...exceeds the value of the consideration shall be deemed to be a gift made by the transferor." Thus, by fiction of law, the difference between the ostensible sale price and the value as determined by the authority, is treated as a gift. The provision ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , 1979. Admittedly, the balance-sheet as on March 31, 1979, did not exist on that date. Thus, the valuation had to be fixed on the basis of the balance-sheet which existed immediately prior to March 20, 1979. Necessarily, the valuation had to be fixed on the basis of the balance-sheet as on March 31, 1978. This is precisely what the Tribunal has done. Mr. Sawhney referred to the decision of the Mysore High Court in CED v. J. Krishna Murthy [1974] 96 ITR 87. On a perusal of the judgment, we find that the following question had been referred to the court for its opinion: "When, for the Wealth-tax Act, valuation of unquoted shares as on 31st March, 1967, has to be done in accordance with the Wealth-tax (Amendment) Rules, 1967, taking the l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e individual shares between the two balance-sheets as on March 31, 1971, and March 31, 1972." The order of the Tribunal which was based on the balance-sheet of March 31, 1971, was, thus, set aside and the matter was remanded for fresh decision. However, we find that a contrary view had been taken in the case of CGT v. H. H. Sethu Parvathi Bai [1984] 145 ITR 124 (Ker). In this case it was categorically held that: "for the gift of shares made by the assessee on March 25, 1971, the value shown in the balance-sheet of the company as on March 31, 1970, should be taken as the proper value." Similarly, in CGT v. Executors and Trustees of the Estate of Late Shri Ambalal Sarabhai [1975] 100 ITR 447 (Guj), it was held that: "since the only balance-sh ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
