COMMISSIONER OF INCOME TAX Vs. LAXMIPAT SINGHANIA

JUDGEMENT

(1.) UNDER Section 256(2) of the Income-tax Act, 1961, the Tribunal has stated the following :

(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.

(3.) THE Tribunal was, in our opinion, justified in affirming the order of the Appellate Assistant Commissioner.