Reopening gift-tax assessment cannot rest on a preferred valuation method alone when no escapement is shown.

Reassessment of gift-tax under section 16(1)(b) was invalid where the assessee had valued gifted shares using one recognised valuation method accepted in the original assessment. The Revenue sought reopening only because another recognised method, or a revaluation based on rule 10(2), might produce a higher figure. The Court held that reopening a concluded assessment is not justified merely to substitute a different accepted method of valuation when no escapement of gift-tax is shown. The reassessment was therefore struck down in favour of the assessee.

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Issues: Whether the reassessment made under section 16(1)(b) of the Gift-tax Act was valid when the assessee had valued the gifted shares on a recognised method of valuation and the Revenue sought to reopen the assessment only because another method might yield a higher value.

Analysis: The assessee had valued the gifted shares according to a recognised method accepted in the original assessment. Reopening was attempted on the basis that the valuation was not in accordance with rule 10(2) of the Gift-tax Rules and on a revaluation that produced a higher figure. The Court followed its earlier view that where one recognised method of valuation has been adopted, the assessment cannot be reopened merely to substitute another recognised method that results in a higher valuation, since that by itself does not establish escapement of gift-tax.

Conclusion: The reassessment under section 16(1)(b) of the Gift-tax Act was held invalid and the answer was returned in favour of the assessee and against the Revenue.

Ratio Decidendi: Reopening of a concluded gift-tax assessment is not justified merely because the Revenue prefers another recognised method of valuing shares that yields a higher figure, when the assessee has adopted one accepted recognised method and no escapement is shown.

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