TaxTMI 
TaxTMI 
1982 (5) TMI 97
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.... (P) Ltd,. and Escorts Farm (R) Ltd. were not quoted in the stock exchange, the shares of M/s. Escorts Ltd. ofDelhi, were quoted in the stock exchange. He first went into the valuation of assessee's holdings in M/s Intercontinent Travamcore (P) Ltd. In this connection, he relied on the balance sheet of the company. However, he made adjustment in the net value of the assets of this company by substituting the market value of the shares of Escorts Ltd. to their cost price shown in the schedule of the balance sheet. We may tell that this aspect of the matter is now in appeal by the assessee before the CIT (A). 2. The WTO, however, while valuing the shares of M/s Escorts Farms (R) Ltd., did not make any such adjustment of the nature describe....
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....uld have adopted the marked value of the shares of Escorts Ltd.,New Delhiheld by that company and not their cost price as was done by him. 4. The CWT gave an opportunity of being heard to the assessee. On behalf of the latter two submissions were made before him. The first submission was that r. 1-D which was followed by the WTO in valuing the shares of the aforesaid two companies and no application to the case of Escorts Farms (R) Ltd., as it was in investment company had as it was specifically excluded from the operation of that rule. The next submission of the assessee before the CWT was that the cost price of the shares of Escorts Ltd.,New Delhihad been correctly taken by the WTO as the asset of the balance sheet of Escorts Farm (R) ....
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....half, the value of any asset etc., shall be estimated to be the price which in the opinion of the WTO it would fetch if sold in the open market on the valuation date." The counsel submitted that the valuation of the share was subject to the rules made in this behalf including r. 1D. He next submitted that if the above rule was to be followed, then the following procedure alone had to be adopted: "The value of all the liabilities as shown in the balance sheet of such company shall be deducted from the value of all its assets shown in that balance sheet. The net amount so arrived at shall be divided by the total amount of its paid up equity share capital as shown in the balance sheet. The resultant amount multiplied by the paid-up value of....
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....that the market value of Escorts Ltd., New Delhi shown in Sch, 'B' of the balance sheet of Escorts Farms (R) Ltd. also formed part of the balance sheet and therefore that value could be substituted for the cost price. In this connection he referred to Expln. (s) I and II of r. 1D. of the WT Rules. 8. We have carefully considered the submissions placed before us. We are in agreement with the arguments of the ld. counsel for the assessee that the valuation of the shares even under s. 7(1) of the Act has to be made subject to any rules made in this behalf. We do not find any contradiction in the rules and in the section in this respect. There is no dispute that it is r. 1D of WT Rules which applies to the case. This rule lays down the proce....