1990 (11) TMI 64

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....SRANI J.-This reference application under section 27(3) of the Wealth-tax Act, 1957, has been filed by the Commissioner of Wealth-tax, Jaipur. It is submitted by Shri V. K. Singhal, learned counsel, that the respondent-assessee is holding some shares of Messrs. Premnath Motors (Rajasthan) Pvt. Ltd. and Messrs. Saraf Textile Mills Pvt. Ltd., which are not quoted. The value of the share in the ca....

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....t, therefore, a question of law arises whether the Tribunal was right in holding that the value of the shares held by the assessee in M/s. Premnath Motors (Rajasthan) Pvt. Ltd. should be taken on the basis of the yield method. It is pointed out that rule 1 D and the proviso thereto are mandatory and not directory. Learned counsel placed reliance on Mrs. Grace Collis v. CWT [1988] 172 ITR 597 (Ker)....

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....986] 159 ITR 549 (Delhi) and held that the value of unquoted shares should be on yield method basis and rejected the appeal of the petitioner. It was also submitted that the tax effect in this case for both the years is Rs. 858 which is nominal and, therefore, will not serve any purpose. It is evident that different High Courts have taken different views regarding the nature of rule 1D. However....

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....bhai [1988] 170 ITR 144 (SC) in which similar matter came up for the consideration of the apex court in which the amount of gift-tax involved was Rs. 5,661. It was pointed out by their Lordships that the magnitude of the mechanism for re-fixation of the value of the gifts and the difference in the quantum of the tax it might result in, do not bear a reasonable or sensible proportion, Having regard....