Estate duty share valuation follows the break-up method where asset value is ascertainable, not the yield basis.

For estate duty valuation of shares in a private company, the statutory preference is the break-up method, because Section 37 of the Estate Duty Act directs valuation by reference to the company's total assets where that value can be ascertained. Rule 1D of the Wealth-tax Rules reflects that approach and may be applied where the Act does not provide detailed computational rules. The yield method may be relevant in other valuation settings, but it cannot displace an express statutory mandate to value shares by reference to assets when asset value is ascertainable.

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Issues: Whether, for estate duty valuation of shares in a private company, the valuation had to be made on the yield basis or by the break-up method with reference to the value of the company's assets.

Analysis: Section 37 of the Estate Duty Act, 1953 specifically directs that the primary method for valuing shares of a private company is reference to the value of the total assets of the company, and only if that value is not ascertainable can another method be adopted. The break-up method is therefore the statutorily preferred method in estate duty valuation. Rule 1D of the Wealth-tax Rules, 1957 embodies that method and can be conveniently applied where the Estate Duty Act does not itself prescribe detailed computational rules. The yield method, though relevant in other valuation contexts, cannot override an express statutory mandate to value with reference to assets where such value is ascertainable.

Conclusion: Valuation by the break-up method under Rule 1D was upheld and the yield basis was rejected.

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