Estate duty valuation of unquoted shares follows Rule 1D using the balance-sheet immediately before the valuation date.

Unquoted shares held by a deceased person for estate duty are to be valued under Rule 1D of the Wealth-tax Rules, 1957, following the earlier binding view applied in the note. Explanation 1 to Rule 1D requires the relevant balance-sheet to be the one drawn up immediately before the valuation date, which in this context is the date of death. The note rejects reliance on an earlier balance-sheet alone as inconsistent with that valuation rule.

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Issues: Whether the value of unquoted shares held by the deceased for estate duty purposes had to be determined under Rule 1D of the Wealth-tax Rules, 1957, and, if so, which balance-sheet was to be taken into account.

Analysis: The question was answered by applying the earlier binding view that unquoted shares may be valued under Rule 1D for estate duty as well. Explanation 1 to Rule 1D makes the valuation depend upon the balance-sheet drawn up on a date immediately preceding the valuation date, which in the present context was the date of death. On that basis, the contention that an earlier balance-sheet alone could be used was rejected as academic in view of the governing valuation rule.

Conclusion: The value of the deceased's unquoted shares was to be assessed under Rule 1D of the Wealth-tax Rules, 1957, on the basis of the balance-sheet immediately preceding the date of death, in favour of the accountable person.

Ratio Decidendi: For estate duty valuation, unquoted shares can be valued under Rule 1D of the Wealth-tax Rules, 1957, and the relevant balance-sheet is the one drawn up immediately before the valuation date.

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