Wealth-tax share valuation follows binding precedent, with rule 1D and approved valuer's method controlling the reference.

Rule 1D under the Wealth-tax Rules, 1957 is treated as the governing method for valuing shares of a private company where binding precedent has already settled the valuation principle. The commentary explains that the earlier decisions in Smt. Kusumben D. Mahadevia and CWT v. Pratap Bhogilal controlled the reference, so the approved valuer's valuation under section 24(6) was accepted as the proper basis. It also notes that the Commissioner's objection on reducing liabilities by advance tax was covered by the same precedent, and the challenge based on excessive delegation did not require separate adjudication.

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Issues: (i) Whether rule 1D of the Wealth-tax Rules, 1957, was mandatory in valuing the shares of a private company on the relevant valuation date; (ii) whether the shares ought to have been valued at Rs. 175 per share as per the approved valuer's valuation; (iii) whether the question raised by the Commissioner concerning reduction of liabilities by advance tax required a contrary view under rule 1D of the Wealth-tax Rules, 1957.

Issue (i): Whether rule 1D of the Wealth-tax Rules, 1957, was mandatory in valuing the shares of a private company on the relevant valuation date.

Analysis: The issue was governed by the earlier decision of the Court in Smt. Kusumben D. Mahadevia, which had already settled the operation of rule 1D in the context of valuation of shares under the Wealth-tax regime. The Court treated that precedent as controlling for the present reference.

Conclusion: Yes. The question was answered in the affirmative and in favour of the assessee.

Issue (ii): Whether the shares ought to have been valued at Rs. 175 per share as per the approved valuer's valuation.

Analysis: Once the governing principle in the earlier precedent was applied, the valuation made by the approved valuer under section 24(6) was accepted as the correct basis for the shares in question.

Conclusion: The shares ought to have been valued at Rs. 175 per share, in favour of the assessee.

Issue (iii): Whether the question raised by the Commissioner concerning reduction of liabilities by advance tax required a contrary view under rule 1D of the Wealth-tax Rules, 1957.

Analysis: The question stood covered by the earlier decision of the Court in CWT v. Pratap Bhogilal, and the same reasoning was applied to the present reference.

Conclusion: The question was answered in the affirmative and in favour of the assessee.

Final Conclusion: The reference was answered on all surviving issues in favour of the assessee, while the challenge based on excessive delegation did not require separate adjudication.

Ratio Decidendi: Where a binding precedent has already settled the valuation principle under the Wealth-tax Act, the reference must be answered consistently with that precedent, and the approved valuer's valuation will prevail accordingly.

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