Controller of Estate Duty vs R.M. Sukhadvala

T.D. Sugla, J.—In this departmental reference, the Tribunal has referred to this court only one question of law u/s 64(1) of the Estate Duty Act, 1953. The question is :

"Whether, on the facts and in the circumstances of the case, the value of the shares of Daruwala Brothers Pvt. Ltd., held by the deceased at the time of his death should be valued in accordance with rule 1D of the Wealth-tax Rules, 1957, on the basis only of its published balance-sheet as on June 30, 1969 ?"

Counsel are agreed that, in view of our court''s judgment in the case of Jehangir Mahomedali Chagla and another Vs. M.V. Subrahmanian, Additional First Assistant Controller of Estate Duty and others, , it has to be held that the value of unquoted shares of a company could be valued in accordance with rule 1D of the Wealth-tax Rules, 1957, for the purpose of estate duty also. The only dispute that remains and which is involved in the question is as to the balance-sheet to be taken into account for the purpose. According to the accountable person, the latest balance-sheet available at the time of the death was the balance-sheet of the company as on June 30,1969, whetheras, according to the Department, the death having taken place on September 30,1969, it was likely that certain things had happened during the course of those three months which ought to be taken into account. In our judgment, this question is only of academic interest in view of our conclusion that the valuation of unquoted shares for the purpose of estate duty also can be and should be made in accordance with rule 1D of the Wealth-tax Rules, 1957. We say so as Explanation 1 to rule 1D itself makes it clear that the valuation in accordance with rule 1D is to be made on the basis of the balance-sheet drawn up on a date immediately preceding the valuation date (in the present case, it will be the date of death). Incidentally, this is also the view taken by the Karnataka High Court in the case Controller of Estate Duty, Mysore Vs. J. Krishna Murthy, . Accordingly, we answer the question in the affirmative and in favour of the accountable person.

No order as to costs.