Statutory valuation rule for unquoted equity shares applies to going concerns, with revision upheld on the valuation issue.

Unquoted equity shares were held to require valuation under Rule 1D of the Wealth-tax Rules because a statutory rule prescribing the mode of valuation binds the authorities under the Act. The Tribunal's view that Rule 1D applied only to companies in liquidation or winding up, and that going concerns could be valued on a yield basis, was rejected. The Court also upheld the Commissioner's revisional power under section 25(2) on the valuation issue, and the question was answered in favour of the Revenue and against the assessee.

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Issues: Whether unquoted equity shares were required to be valued under Rule 1D of the Wealth-tax Rules, and whether the Commissioner's revision under section 25(2) of the Wealth-tax Act was valid.

Analysis: The question turned on the binding effect of a statutory rule prescribing the mode of valuation. The Court followed the Supreme Court's ruling that where a rule lays down the manner of valuing a particular asset, the authorities under the Act must apply that method. On that basis, the Tribunal's view that Rule 1D applied only to companies in liquidation or winding up and that going concerns could be valued on yield basis was rejected.

Conclusion: The unquoted equity shares had to be valued under Rule 1D, and the question was answered in favour of the Revenue and against the assessee.

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