TaxTMI 
TaxTMI 
1987 (7) TMI 154
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....tate. 2. The main issue in the present appeals relates to the valuation of certain shares of M/s. Saraya Sugar Mills, which had been gifted by the assessee on21-5-1978. The assesses had disclosed the value of 70,000 shares at Rs. 2,62,500 but at the time of assessment it had been contended by the representative of the assessee that while valuing these shares the liability in respect of the provision for gratuity should be deducted. It was also contended that as the shares are not readily saleable in the market as a deduction of 30% should be allowed. The Gift-tax Officer, however, determined the value under Rule 1D of the Wealth-tax Rules and took the value at 75% of that value as no dividends had been declared by the company. He did not....
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....appeal. The case of the Department is that while valuing the shares the Commissioner of Gift-tax was not justified in not applying yield method and not Rule 1D of the Wealth-tax Rules. The counsel for the assesses, on the other hand, submitted that the Commissioner of Gift-tax (Appeals) did not consider the plea of the assessee that in the case of Gift-tax the value of the shares could be determined on the basis of the preceding and succeeding balance-sheets and not merely one of them. It was also submitted by him that the CGT (Appeals) did not take into consideration the fact that the position of the sugar industry was precarious at the relevant time when the gift was made. He contended that without considering the financial results of the....
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....ong reason. It had also been indicated that where dividends are not the current indicator of the value the profits should be taken into consideration. 7. In the case of S. Ram, the Madras High Court has held that for the purpose of valuing the shares under the wealth-tax, gift-tax, and estate duty the provisions for gratuity based on actuarial valuation should be held as a deduction. The Madras High Court has referred to the decision of the Supreme Court in the case of Vazir Sultan Tobacco Co. Ltd. v. CIT [1981] 132 ITR 559 while deciding the above point. 8. One other question decided by the Madras High Court in the above case was the choice of balance-sheet which has got to be taken as the basis for purpose of computation of company'....
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....t is also stated that the sugar mills were made to crush all available cane in uneconomical recovery resulting in huge built up stocks and production far outstripped the consumption. On16th April, 1978sugar was decontrolled after holding back the release of free-sale sugar. The companies had to sell the stock of sugar to meet their liability for sugarcane. This resulted in crash in sugarcane prices. However, it is noted by the Directors that on account of direction carried out prior to the start of crushing season in spite of cane inferior to the previous year the company had normal working season up to 7th April and they had highest recovery, the highest daily crushed and higher percentage of better cane sugar as compared to previous five ....