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Issues: Whether rule 1D of the Wealth-tax Rules overrides section 24(6) of the Wealth-tax Act, whether the Revenue could rely on rule 1D though no specific argument was advanced before the Tribunal, and whether valuers determining the value of unquoted shares were bound to follow the method prescribed by rule 1D.
Issue (i): Whether rule 1D of the Wealth-tax Rules overrides section 24(6) of the Wealth-tax Act.
Analysis: Section 24(6) of the Wealth-tax Act, 1957 and rule 1D operate in different spheres. The rule does not displace the statutory provision governing reference to valuers; instead, the prescribed method under the rule governs the valuation exercise when unquoted shares are valued.
Conclusion: Rule 1D does not override section 24(6) of the Wealth-tax Act, 1957; both operate in their respective distinct fields.
Issue (ii): Whether the Revenue could rely on rule 1D though no specific argument was advanced before the Tribunal.
Analysis: The absence of a specific reliance on the rule before the Tribunal did not prevent the Department from invoking it in the reference, since the point arose from the legal framework applicable to valuation.
Conclusion: The Department was entitled to rely on rule 1D in the reference notwithstanding that the rule had not been specifically argued before the Tribunal.
Issue (iii): Whether valuers determining the value of unquoted shares were bound to follow the method prescribed by rule 1D.
Analysis: The valuation of unquoted shares had to conform to the statutory method laid down in rule 1D. On that footing, the valuers were required to apply the prescribed method.
Conclusion: The valuers were bound to apply the method prescribed by rule 1D while valuing the unquoted shares.
Final Conclusion: The reference was answered in favour of the Revenue on the material questions, and the Tribunal's approach was not held to be erroneous on the point left unanswered.
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