JUDGMENT

P. N. BHAGWATI, J.:—These appeals by special leave raise a short question as to whether a reference should have been called for by the High Court in each of these cases. Some of these cases are under the Gift Tax Act while others under the Wealth Tax Act. They all relate to the valuation of the ordinary shares of a private limited company called Mafatlal Gagalbhai Pvt. Ltd. which is admittedly an investment company: The assessee in these cases claimed in the course of assessments to gift tax or wealth tax, as the case may be that the value of the shares should be taken to be the figure arrived at by M/s. C. C. Choksy & Co., Chartered Accountants, by applying the profit earning method of valuation of shares without making any adjustment in the profits of the company. It is not necessary for the purpose of these appeals to set out the different figure of valuation given in the report of M/s. C. C. Choksy & Co. and claimed by the assessees as representing the correct value of the shares on the material dates, because the question with which we are concerned is one of principle and the actual figures of valuation are not relevant. The Gift Tax and Wealth Tax Officers did not accept the figures of valuation given by the assessees on the basis of the profit earning method and valued the shares at much higher figures by applying the break-up method. This naturally involved the assessees in higher tax liability and hence they preferred appeals to the Appellate Assistant Commissioner. The Appellate Assistant Commissioner applied what has been described in the record as rule of three and reduced the valuation of the shares but the figures determined by the Appellate Assistant Commissioner were still higher than those claimed by the assessees. Since the valuation of the shares made by the Gift Tax and the Wealth Tax Officers was reduced by the Appellate Assistant Commissioner, the Revenue was dissatisfied and it, therefore, preferred appeals against the orders of the Appellate Assistant Commissioner to the Tribunal. The assessees were also unhappy with the valuation made by the Appellate Assistant Commissioner since he did not accept the valuation put forward on their behalf and hence they too preferred cross objections in the appeals filed by the Revenue. The appeals and the cross objections in the cases forming the subject-matter of Civil Appeal No.129/76 were heard together by the Tribunal. The only controversy before the Tribunal was as to which method should be followed for valuing the shares of the company. The Revenue contended that in the case of an investment company like Mafatlal Gagalbhai Pvt. Ltd., the proper method of valuation would be to take the mean of two values, one arrived at by applying the profit earning method and the other by applying the break-up method, while the assessees pleaded for adopting only the profit-earning method, since in their submission that was the only method which could be applied for valuation of shares of a going concern. The Tribunal by a common judgment accepted the contention of the assessees and adopted the valuation of the shares made by M/s. C. C. Choksy and Co. by applying the profit earning method and in the result rejected the appeals of the Revenue and allowed the cross objections of the assessees. We shall discuss in some detail the reasons which weighed with the Tribunal in coming to this decision when we deal with the arguments of the parties, but suffice it to state for the present that in taking this view, the Tribunal followed the recent decision of this Court in Commr. of Wealth Tax v. Mahadeo Jalan, (1972) 86 ITR 621. Similar orders were passed by the Tribunal in the appeals and cross-objections relating to the other assessees. The Revenue was obviously aggrieved by the orders of the Tribunal and, therefore, it made applications to the Tribunal for referring to the High Court the following question of law, namely,

"Whether the Tribunal is right in holding that the sha