- (1.) These two appeals by the revenue are directed on the following common grounds : 1. That on the facts and in the circumstances of the case the AAC erred in law as well as in facts in interpreting the ration of the principle decided in the case of CWT v. Mahadeo Jalan, 1972 86 ITR 621 . 2. That on the facts and in the circumstances of the case, the AAC erred in law in holding that valuation of the shares held by the assessee during the year should not be done in accordance with the provisions of rule 1D of the Wealth-tax Rules, 1957 (the Rules).
(2.) The assessee held shares of Madhu Jayanti (P.) Ltd. and Jay Bharat Cotton Textiles (P). Ltd. According to the assessee, the shares were to be valued on the basis of the principle laid down by the Supreme Court in the case of Mahadeo Jalan (supra) so also on the basis of the decision of the Bombay High Court in the case of Smt. Kusumben D. Mahadevia v. CWT,1980 124 ITR 799 . The WTO rejected the assessees submission inasmuch as he was of the opinion that the valuation of unquoted shares was to be made keeping in view the provisions of rule 1D.
(3.) On appeal to the AAC, it was contended on behalf of the assessee that the method of break-up value was not the only method and the shares were to be valued only on yield method in view of the decisions cited before the WTO. It was also contended that the break-up value method was resorted to only when the company was ripe for liquidation or in exceptional circumstances. It was pointed out tht even though the company was not ripe for liquidation the WTO had not established that there existed exceptional circumstances warranting departure from the general procedure of determining the valuation on yield method. The assessee also furnished before the AAC the valuation report given by a registered valuer, A. C. Roy Co. The AAC after considering the valuation report given by a registered valuer directed the WTO to value the shares of Jay Bharat Cotton Textiles (P.) Ltd. at Rs. 36.96 each and those of Madhu Jayanti (P.) Ltd. at Rs. 96 each.;