B.P. Jeevan Reddy, C.J. - (1.) UNDER Section 256(2) of the Income-tax Act, 1961, the Tribunal has stated the following : "Whether, on the facts and in the circumstances of the case, the Tribunal was justified in accepting the valuation of shares of Messrs. J. K. Commercial Corporation and Messrs. J. K. Udyog Ltd., at Rs. 69.17 and Rs. 14. 74 per share, respectively, as shown by the assessee ?"
(2.) THE assessment year concerned herein is 1969-70. In the return regarding this assessment year, the assessee declared capital gains of Rs. 14,621. This gain had resulted from the transfer of 1,440 shares of Messrs. J. K. Commercial Corporation and 100 shares of Messrs. J. K. Udyog Ltd. by the assessee to certain other persons. THE assessee stated that these shares were transferred at the rate of Rs. 69.17 and Rs. 14.74 per share, respectively. THE Income-tax Officer was of the opinion that since the vendors are directly and indirectly connected with the assessee and also because the market value of the said shares, according to the breakup value method, was much higher, he estimated the value of the said shares at Rs. 101.79 and Rs. 17. 63, respectively, under section 52 of the Income-tax Act, 1961. Against the aforesaid order, the assessee filed an appeal. THE Appellate Assistant Commissioner observed that, in the case of a connected assessee, Shri Gaur Hari Singhania, in wealth-tax proceedings for the assessment years 1968-69 and 1969-70, the Allahabad Bench of the Appellate Tribunal had held that the correct value of shares of Messrs. J. K. Udyog Ltd. was Rs. 17.69 per share. It also observed that another Bench of the Appellate Tribunal of Allahabad has valued the share of Messrs. J. K. Commercial Corporation at Rs. 63.17 per share. THE Appellate Assistant Commissioner, accordingly, directed the Income-tax Officer to adopt the said figures as the market value of the respective shares and to modify the assessment order accordingly. THE matter was carried in further appeal to the Tribunal by the Revenue which was dismissed by the Tribunal. The Tribunal was of the opinion that the Appellate Assistant Commissioner was right in directing the Income-tax Officer to recompute the capital gains by taking the value of the shares at the figure shown by the assessee whereafter the present appeal was obtained by the Revenue. The assessee had valued the shares of Messrs. J. K. Commercial Corporation at Rs. 69.17 and of Messrs. J. K. Udyog Ltd. at Rs. 14.74, whereas the Appellate Assistant Commissioner opined that they should be valued at Rs. 63.17 and Rs. 17.69, respectively, in accordance with the orders of the two Appellate Tribunals in wealth-tax appeals filed by a connected assessee. Thus, so far as the shares of J. K. Commercial Corporation are concerned, the assessee's valuation is higher than the valuation determined in the wealth-tax appeals aforesaid. In such a situation, the proper course is to accept the valuation of the assessee. So far as the shares of Messrs. J. K. Udyog are concerned, the situation is different, i.e., the valuation determined in the wealth-tax proceedings is higher than the valuation disclosed by the assessee. In such a case, the higher valuation determined in the wealth-tax proceedings shall be adopted according to the order of the Appellate Assistant Commissioner.
(3.) THE Tribunal was, in our opinion, justified in affirming the order of the Appellate Assistant Commissioner. Accordingly the question is answered in the affirmative, i.e., in favour of the assessee and against the Revenue, subject to the above clarification.;