SEN, J. - (1.) THE Tribunal has referred the following question of law to this Court under S. 26(3) of the GT Act, 1958 ('the Act') : "1. Whether, on the facts and in they circumstances of the case, the order of the Tribunal upholding the order of the CIT under S. 24(2) of the GT Act, 1958 is vitiated for having relied on certain private Departmental instructions relating to valuation of the shares although such instruction were not referred to or relied upon by the CIT for passing his said order ? 2. Whether, on the facts and in the circumstances of the case, the Tribunal was right in upholding the order of the CIT under S. 24(2) of the GT Act, on the basis of the private Departmental instructions issued to GTO's for valuation of the shares ? 3. Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the private Departmental instructions issued to GTO's by the Board for determining the value of shares under the GT Act, were binding on them and that valuation not made in accordance with such instructions was wrong and prejudicial to the interest of revenue ? 4. Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the principles for determination of the market value of shares under r. 1 D of the WT Rules, 1957 were not relevant for the valuation of the shares under the GT Act, 1958? 5. Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the book value of the assets shown in the balance sheet of a company could be distributed for determining the break up value of the shares under the GT Act ? 6. Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that in the case of the shares of the said Bachraj and Co. Ltd., a purchaser would go on the basis of the market value of the assets merely because figures of market value have been mentioned in the balance sheets of the said company and whether the aforesaid conclusion of the Tribunal is based on any material ?" 7. Whether, on the facts and in the circumstances of the case, the Tribunal was correct in holding that the CGT was justified in revising the order of the GTO on the ground that it was erroneous insofar as it was prejudicial to the interest of the Revenue ?"
(2.) WE need not answer specifically any of these questions. The dispute is basically on the question of valuation of shares. The Supreme Court has pointed out that the question of correct principles applicable to the case of valuation of shares is a question of law. In the case of CGT vs. Executors & Trustees of the Estate of Late Shri Ambalal Sarabhai (1988) 67 CTR (SC) 247 : (1988) 170 ITR 144 (SC) : 36 Taxman 162A the Supreme Court had occasion to go into the question as to what should be the correct method of valuation of unquoted share of a private company. There the supreme Court reiterated that the principles laid down in the case of CWT vs. Mahadeo Jalan 1972 CTR (SC) 395 : (1972) 86 ITR 621 (SC) and more particularly in the case of CWT vs. Smt. Kusumben d. Mahadevia (1980) 14 CTR (SC) 366 : (1980) 122 ITR 38 (SC) should be followed. In that view of the matter, the Supreme Court held that the Tribunal would have to go through the exercise of the determination of the value of shares once again by adopting the correct principles. The Supreme Court, however, in that case having regard to the small amount of money involved and the case being already two and half decades old decided not to set in motion afresh the old litigation. But the declaration of law was made by the Supreme Court as to the method of valuation of such shares.
(3.) UNDER the circumstances, we remand the case back to the Tribunal to value the disputed shares in accordance with the principles laid down by the Supreme Court in the case of Smt. Kusumben D. Mahadevia (supra). The reference is accordingly disposed of.;