Judgement

VENKATACHALIAH, J. : - This appeal, by certificate, by the Commissioner of Income-tax, Gujarat, directed against the order dated, 10-10-1974 of the Gujarat High Court in Gift Tax Ref. No. 1of 1973 : (reported in (1975) 39 Taxation 7) raises a question touching the correct principles of valuation of certain shares constituting the subject-matter of a gift, held in a company incorporated in the United Kingdom analogous to a private limited company in India.

2. Shri Ambalal Sarabhai, since deceased, held 480 shares in an English Company M/s. Bakubhai & Ambalal Ltd., London, the share capital of which consisted of 2000 shares of £ 10/- each. On 17-10-1964, under eight deeds of gift, the said Ambalal Sarabhai made gifts of the said 480 shares to certain members of his family. In the proceedings of the assessment to gift-tax respecting said gifts the question of the proper basis for determination of the value of the gift having arisen, the assessee contended that, as the shares were not quoted in the stock-exchange, their value be determined on the average of break-up value indicated by the balance-sheets of the Company as on 31-3-1964 and 31-3-1965, the former figure was Rs. 507