Share valuation based on accountancy principles did not raise a referable question of law; income-tax reference failed.

Valuation of shares for capital gains, where immovable property was exchanged for shares, was treated as a factual exercise based on accepted accountancy principles for a private limited company; no error of law or principle was shown, so no referable question of law arose. The court also held that an appeal was not defeated merely because a question of interest under section 139 was embedded in the broader capital gains dispute, since maintainability depends on the substance of the matter. The income-tax reference was dismissed because the proposed questions did not arise for decision as questions of law.

---

---

Issues: (i) Whether the Tribunal's valuation of shares, made for determining capital gains on exchange of immovable property for shares, gave rise to a question of law referable to the High Court. (ii) Whether the appeal was maintainable where the question of charging interest under section 139 formed part of the capital gains appeal.

Issue (i): Whether the Tribunal's valuation of shares, made for determining capital gains on exchange of immovable property for shares, gave rise to a question of law referable to the High Court.

Analysis: The valuation was based on accepted principles of accountancy for a private limited company and the Tribunal had applied those principles to the facts found by it. No error of law or principle in the approach of the Tribunal was shown, and the dispute was essentially factual.

Conclusion: The questions relating to capital gains did not arise as questions of law from the Tribunal's order.

Issue (ii): Whether the appeal was maintainable where the question of charging interest under section 139 formed part of the capital gains appeal.

Analysis: The question of interest was embedded in the broader appeal relating to capital gains, and the appeal could not be treated as one filed only on the isolated question of interest under section 139. On that basis, maintainability was not defeated.

Conclusion: The appeal was maintainable, but the reference still failed because no referable question of law arose from the Tribunal's order.

Final Conclusion: The income-tax reference was dismissed as the proposed questions did not arise for decision on a referable question of law, and the assessee's challenge failed.

Ratio Decidendi: A Tribunal's valuation based on accepted accountancy principles, unless shown to involve a legal error, does not give rise to a referable question of law; maintainability of an appeal is determined by the substance of the matter and not by isolating one component of relief.

---