TMI Blog1997 (12) TMI 104X X X X Extracts X X X X X X X X Extracts X X X X ..... arch 28, 1973, and March 31, 1973. That, however, is not the case of the assessee. Under these circumstances, the judgment under appeal is upheld. The appeal is dismissed. - - - - - Dated:- 2-12-1997 - Judge(s) : SUHAS C. SEN., V. N. KHARE JUDGMENT The judgment of the court was delivered by SUHAS C. SEN J.---The following question of law was referred by the Tribunal to the High Court under section 26(1) of the Gift-tax Act, 1958 : " Whether, on the facts and in the circumstances of the case, the balance-sheet figures as on March 31, 1972, should be taken for ascertaining the break-up value of the shares gifted and not the balance-sheet figures as on March 31, 1973 ?" The assessment year involved is 1973-74. The dispute relate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... balance-sheet for the year ended on March 31, 1972. We are unable to uphold the assessee's contention. The Gift-tax Officer has to find out the correct value of the shares as on the date of the gift. The gift was made only three days before the financial year ending on March 31, 1973. The balance-sheet as on March 31, 1973, will give a more realistic picture of the value of the assets of the company than the balance sheet as on March 31, 1972. Therefore, for calculating the break-up value of the shares, the balance-sheet figures as on March 31, 1973, would be more relevant. The contention made on behalf of the assessee, if upheld, would lead to absurd result. If the gift was made on March 28, 1973, the value will have to be computed in a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rch 31, 1971, and March 31, 1972. The Tribunal was not, therefore, justified in ignoring or disregarding the balance-sheet as on March 31, 1972. The High Court held that if anything had happened to the assets and liabilities of the company between March 28, 1972, and March 31, 1972, that could also be taken into consideration by the Tribunal. The Tribunal was directed to re-examine the question in that light again. We are in agreement with this approach of the Madras High Court. In the instant case, the balance-sheet figures as on March 31, 1972, give the picture of the value of the various assets of the company up to that date. The company may have flourished thereafter and the value of the assets may have increased. It is also possible ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Gift-tax Officer when he made the valuation of unquoted shares. It was not difficult to get a precise picture of the value of the shares as on March 28, 1973, from this balance-sheet. We were referred to a large number of decisions, but it is not necessary to specifically deal with all of them. We are of the view having regard to the fact that the gift was made on the verge of the close of the accounting year ending on March 31, 1973, the balance-sheet as on March 31, 1973, should be taken as the basis for ascertaining the break-up value of the shares as on March 28, 1973. However, suitable adjustments will have to be made if there has been any variation in the value of the assets of the company between March 28, 1973, and March 31 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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