Unquoted share valuation: break-up value accepted, Revenue's alternative method rejected, and no substantial question of law arose.

In the absence of a quoted market price for unquoted shares, the appellate authorities were entitled to adopt the break-up value method, and that permissible valuation could not be displaced in income-tax proceedings merely because the Revenue preferred another approach. Reliance on wealth-tax valuation principles and the CBDT circular was held inapposite for the assessment in question. As the Tribunal had affirmed one of two possible valuation views, no substantial question of law arose, and the Revenue's addition based on an alleged perquisite failed.

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Issues: Whether, for valuing unquoted shares purchased by the assessee, the Revenue could treat the break-up value as the market price and add the alleged perquisite in the assessee's income, and whether any substantial question of law arose from the Tribunal's affirmance of the appellate valuation.

Analysis: The shares were not listed on any stock exchange, so there was no actual market price. The appellate authorities adopted the break-up value method and relied on Rule 5 of Schedule II to the Gift-tax Act to determine the value of the unquoted equity shares. The Revenue's reliance on the valuation principle in the wealth-tax context and on the CBDT circular was held to be inapposite for income-tax assessment. It was also noted that where two views are possible on valuation and the appellate authorities have taken one permissible view, interference is not warranted.

Conclusion: The valuation adopted by the appellate authorities was upheld, the Revenue's addition failed, and no substantial question of law arose.

Final Conclusion: The Revenue's challenge to the valuation of the unquoted shares was rejected and the Tribunal's order was left undisturbed.

Ratio Decidendi: In the absence of a quoted market price for shares, a permissible appellate valuation based on break-up value will not be displaced in income-tax proceedings merely because the Revenue prefers another valuation approach, especially where no substantial question of law is shown.

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