TaxTMI 
TaxTMI 
1979 (11) TMI 11
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....return, the shares were valued at Rs. 4,025. This was arrived at by following the break-up value method on the basis of the balance-sheet of the company for the relevant year. This was accepted by the WTO who accepted the return under s. 16(1). The assessment was completed on November 30, 1972. The assessee appealed to the AAC. It was argued on their behalf that they had made applications, on July I 1, 1972, requesting the WTO to adopt a revised valuation for the shares and allow a further opportunity to the assessee to prove their contentions. This application was not allowed. The request was repeated in appeal. The AAC did not accept the request for additional opportunity being afforded. He confirmed the WTO's orders of assessment and dismissed the appeals. The assessee preferred further appeals to the I.T. Appellate Tribunal. The Tribunal took note of the fact that legislation was proposed for nationalising the press and that this was likely to bring about a depreciation in the value of the shares of such a company, as was involved in these cases. The Tribunal, therefore, allowed the discount by fixing the value of the shares at Rs. 30 per share. In taking this view and depressi....
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....om the business wherever arising during that year. (3) Notwithstanding anything contained in sub-section (1), where the valuation of any asset is referred by the Wealth-tax Officer to the Valuation Officer under section 16A, the value of such asset shall be estimated to be the price which, in the opinion of the Valuation Officer, it would fetch if sold in the open market on the valuation date, or, in the case of an asset being a house referred to in sub-section (4), the valuation date referred to in that subsection. (4) Not withstanding anything contained in sub-section (1), the value of a house belonging to the assessee and exclusively used by him for residential purposes throughout the period of twelve months immediately preceding the valuation date may, at the option of the assessee, be taken to be the price which, in the opinion of the Wealth-tax Officer, it would fetch, if sold in the open market on the valuation date next following the date on which he became the owner of the house, or on the valuation date relevant to the assessment year commencing on the 1st day of April, 1971, whichever valuation date is later: Provided that where more than one house belonging to ....
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....y asset may be determined ..........." The section itself opens with the words " subject to any rules made in this behalf ", thereby bringing out the paramountcy of the rules. The section then proceeds to use imperative language by providing that the value of any asset " 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. Turning to the rule again, we notice the imperativeness of the provision in the direction that the value of an unquoted equity share " shall be determined. In the context and from the purport of the section and the rule, we do not see any warrant or justification for construing the expression " shall " in the section and the rule as " may " or in understanding this provision as directory and not mandatory. On the other hand, we think, that effect should be given to the plain and simple provision of the rule. Counsel for the Revenue cited the decisions in CWT v. Sripat Singhania [1978] 112 ITR 363 (All) and CWT v. Padampat Singhania [1979] 117 ITR 443 (All). In the earlier of these cases, a Division Bench of the Allahabad High Court explained the position thus (at p. 366): ....
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.... behind that opinion. We are unable to accept this argument as correct. It is to be remembered that with regard to both conditions, the first and initial duty is that of the Income-tax Officer to determine whether the conditions or any of them are fulfilled, secondly, if the opinion of the Income-tax Officer with regard to the second condition is to be inviolate by reason of the difference in language, then it should be inviolate in all cases. Why should it be inviolate in one case and not so when the assessee appeals against a determination made adverse to him ? We feel that the second condition is expressed in the terms in which it has been expressed, because it involves an inferential process and the expression 'in the opinion of the Income-tax Officer' is aptly used as that officer must in the first instance make the determination. It does not necessarily follow that the Appellate Assistant Commissioner cannot revise the determination and exercise the power which the Income-tax Officer could exercise.' " The Allahabad High Court agreed with the principles stated in McMillan's case [1958] 33 ITR 182 (SC). It was of the opinion that the expression " as it thinks fit " in s. 24....