COMMISSIONER OF GIFT TAX Vs. PRITHVI NATH SHARMA

JUDGEMENT

(1.) AT the instance of CGT, Baroda, following question of law arising out of its order dt. 7th Jan., 1983, by the Tribunal, Ahmedabad has been referred to this Court for its opinion : "Whether, on the fact and in the circumstances of the case, the Tribunal was right in law in coming to the conclusion that r. 1D of the WT Rules were applicable for determining the value of the unquoted shares for the purpose of the gift -tax -

(2.) THE respondent assessee had made a gift of certain shares of private limited companies. The shares were not quoted on the stock exchange. As shares were of private limited company, free transfer of which was prohibited under its memorandum of association and were not quoted at stock exchange to determine its price on the date of gift, the value of shares gifted was worked out at Rs. 31,000. The assessee claimed a deduction of 15 per cent of such sum by inviting attention to r. 1D of the WT Rules. The ITO rejected the claim of the assessee for adjusting the value of shares gifted for the purpose of levying gift -tax. On appeal, the learned AAC, agreed with the claim of the assessee, and directed the GTO to recompute the value of gift for the tax purposes. On further appeal, the Tribunal agreed with the view taken by learned AAC following its own earlier decision and a decision of the Bombay Tribunal. In these circumstances, the aforesaid question has been referred to us.

(3.) HEARD learned counsel for the parties. At the relevant time, to which the assessment in question relate, S. 6 which provided for valuing the gifts read as under :