9911796707
TMI Blog1986 (12) TMI 54X X X X Extracts X X X X X X X X Extracts X X X X ..... were valued by the respective assessees on the basis of Rule 1D of the WT Rules. The WTO did not accept the claim of the assessees. He valued the shares as per yield method. The value taken by the assessees as per share and the value taken by the WTO as per yield method are as under: Name of the company As per assessee As per WTO . . Rs. Rs. Asian Paints (I) Ltd. 124 212 Resins & Plastics (P) Ltd. 202 285 Hindustan Mineral Products Co. Pvt. Ltd. 260 1623 Mineral Mining Co. (P) Ltd. 1100 1781 4. Being aggrieved the assessees carried the matter before the AAC claiming that the shares should be valued as per r. 1D of the WT Rules. The AAC also did not accept the claim of the assessee. He confirmed the view taken by the WTO ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the share should be valued as per r. 1D of the WT Rules or as per yield method. Their Lordships have observed as under: The normally permissible method of determining the market value in the case of unquoted shares is the yield method though under exceptional circumstances the break up method could also be utilised. Considering the scheme of s. 46(2), first, in the light of the fact that on principles of accountancy, the proper method for valuing a share of a private company when the share is not quoted on the stock exchange is not the break-up value method but the yield method and, secondly, in the context of the fact that the legislation has used in s. 46(2) 'may' and 'shall' in the same section, it clearly appears that the use of the w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Supreme Court in the aforesaid cases and of the Bombay High Court decision in the case of Smt. Kusumben D. Mahadevia vs. N.C. Upadhaya & Anr. (1980) 14 CTR (Bom) 20 : (1980) 124 ITR 799 (Bom) and held that the break up method prescribed by r. 1D can be resorted to only where the company is ripe for liquidation and to exceptional circumstances, for example, where to fluctuations of profits or the uncertainty of conditions on the relevant valuation date any reasonable estimate of the profit earning capacity and yield from the company is not possible, while in all other cases the only method of valuation will be under the yield method. 9. There was a query from the Bench, what was the exceptional circumstances which compels to value the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se appeals is whether the AAC erred in not accepting the claim of the assessee regarding the reduction of 15 per cent in the value of the shares for the reason for non transferability of shares in question. 13. After heaving both the sides we find from para 14 of the AACs order that the AAC has followed the order of the Tribunal on this issue and did not accept the claim of the assessee. No other reason has been shown to us by the ld. counsel for the assessee except the reason put forth before the AAC. In our view when the AAC has followed the order of the Tribunal on the issue, we do not find any infirmity in this order. Accordingly the view taken by the AAC on this point is also confirmed. 14. In the result, the appeals are dismissed. ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
