SENGUPTA, J. - (1.) IN this reference under S. 26(1) of the GT Act, 1958 ('the Acr') for the asst. yr. 1981-82 the following questions of law have been raised: "1. Whether the Tribunal was justified in law in holding that the provision of r. 1D of the WT Rules, 1957 is directory and not mandatory? 2. Whether, on the facts and in the circumstances of the case, the Tribunal was justified in directing the GTO to accept the valuation of the unquoted shares made by the assessee's approved value on yield basis. With out adopting the valuation on the basis of the break-up value of the shares as per r. 1D of the WT Rules, 1957?" Shortly stated, the facts are that the assessee, Shri G.P. Birla, Executor to the Estate of Late B.N. Birla, filled a gift-tax return for the asst. yr. 1981-82 on 26th June, 1981 showing a taxable gift of Rs. 9,84,280. As per revised computation of taxable gifts filed by the assessee the value of 200 shares of Birla Bros. (P) Ltd. was shown at Rs. 955.55 per share as per valuer's report dt. 31st March, 1981. The GTO, however, determined the value of the shares at Rs. 1,260.06 per share by adopting the break-up value method as per r. 1D of the WT Rules, 1957.
(2.) THE assessee filed and appeal before the CIT (A) who directed the GTO to accept the valuation of the shares of Birla Bros.(P) Ltd. as shown by the assessee. Against the order of the CIT (A) the Department came up in appeal before the Tribunal. It was contended on behalf of the Department that r. 1D of the WT Rules is mandatory and that the GTO was fully justified in determining the valuation of the shares of Birla Bros. (P) Ltd, by adopting the break-up value method as prescribed under r. 1D.
(3.) THE Tribunal following its earlier decisions in the case of Smt. Manarama Devi Birla and in the case of Administrator to the Estate of B.N.Birla (deceased), held that r. 1D is directory and not mandatory. The Tribunal pointed out that the valuation of shares was disclosed by the assessee on the basis of the report of the approved valuer. It was not disputed that the approved valuer determined the valuation of the shares by adopting yield method. The Tribunal found that the valuation determined by the approved valuer and disclosed by the assessee is in accordance with the principles laid down by the Supreme Court in the case of CGT vs. Smt. Kusumben D. Mahadevia (1980) 14 CTR (SC) 366 : (1980) 122 ITR 38. It was held that the CIT (A) was justified in directing the ITO to accept the valuation of shares of Birla Bros.(P) Ltd. as disclosed by the assessee.;