1990 (1) TMI 69

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.... value of the shares worked out in accordance with rule 1D of the Wealth-tax Rules ? " The question involved is, in our opinion, covered by a Division Bench authority of this court in the case of the assessee herself, namely, Sharbati Devi Jhalani v. CWT [1986] 159 ITR 549. Learned counsel for the petitioner states that the said decision of this court has not been accepted by the Department and a special leave petition is pending in the Supreme Court. Be that as it may, as far as this court is concerned, the decision in the aforesaid case clearly covers the present controversy before us and, as far as this court is concerned, the question sought to be raised is academic. Learned counsel for the petitioner then sought to contend tha....

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....the company and of the assessee is the same. If the two dates are different, then the assessee can show to the Wealth-tax Officer that on his valuation date, the value of the unquoted shares arrived at by the yield method is the one which should be adopted. By saying that in such a case, namely, where the two dates are different, rule 1D is directory what is meant is that if the assessee chooses not to take recourse to valuing the shares as per the yield method, then it is open to the Wealth-tax Officer to apply rule 1D. It is in this sense that it was observed by this court that rule 1D is directory where the valuation date of the company and the valuation date of the assessee do not coincide. In such a case, if the Wealth-tax Officer prop....

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....ection (3) opens with the words 'notwithstanding anything contained in sub-section (1)'. This will mean that notwithstanding there being anything contrary in sub-section (1), the Valuation Officer is to estimate the value of an asset in the manner specified in sub-section (3). In other words, the powers of the Valuation Officer are not subject to any rules which may be made in determining the value of an asset. The Valuation Officer, therefore, is not bound to value the unquoted shares by adopting the method prescribed by rule 1D. The Valuation Officer is to value the unquoted shares by estimating what it would fetch if sold in the open market on the valuation date. How such shares are to be valued has been specified by the Supreme Court in....