The valuation of unquoted shares for Estate Duty purposes should be based on recognized methods of valuation and published information, emphasizing the principles of valuation under the relevant Acts and Rules.

( 1 ) UNDER S. 64 (1) of the Estate Duty Act, 1953 (hereinafter called the act), the Appellate Tribunal has stated a case and referred the following queet on for the opinion of this Court:" When, for Wealth-tax Act, valuation of unquoted shares as on 31st March 1967 has to be done in accordance with Wealth-tax (Amendment) rules 1967 taking the last published Balance Sheet as on 31st december 1966 as the basis, whether the Tribunal is right in placing the same value as on 11-9-1967 the date of the death of the deceased for the purpose of Estate Duty assessment resulting in non-consideration of other items not covered by Wealth-tax Rules going into the determination of the value of shares for Estate Duty purpose ? "learned Counsel on both sides submitted that the question as framed is not satisfactory and that the same may be recast. As agred to by the parties, we recast the question thus : "whether there was material for the Appellate Tribunal to determine the value of the shares at Rs. 1,69,020? "

( 2 ) ONE Mr. William Whitley died on September 11, 1967. At the time of his death he owned certain shares in Senapathy Whitley (P) Ltd. The subscribed equity share capital of the said company was divided into 15,000 shares of Rs. 100 each, of which the deceased held 1,000 shares. The accounting year of the company ends on 31st December and its Balance Sheet as at 31st December 1966 had been published before the date of death. The shares held by the deceased as on 31-3-1967-the Valuation date'-for the assessment year 1967-68 had been valued by the Wealth-Tax Officer at rs. 1,69,020 in accordance with S. 7 of the Wealth Tax Act, 1957 read with rule 1d of the Wealth Tax Rules, 1957. Subsequent to 1-4-1967 but before the date of death, the company had issued 6,000 Bonus shares raising its subscribed Equity Share Capital from Rs. 15,00,000 to Rs. 21,00,000. 400 bonus Shares were issued to the deceased. Thus, on the date of death, the deceased held 1,400 ordinary shares of the face value of Rs. 100. The accountable person declared the value of the said shares at Rs. 1,52,600. The Assistant Controller of Estate Duty arrived at the value of Rs. 2,23,174 valuing each share at Rs. 159-41 which was arrived at in the following manner: value of net assets of the company on tha basis of its Balance -Sheet as at 31-12-1966 Rs. 26,82,792-00.

( 3 ) ESTIMATED value of goodwill Rs. 12,33,800-00. Total Rs. 39,16,592-00. Break-up value on the above basis was worked at Rs. 186-50 a share. As the death took place nearly eight months after 31-12-1966, taking into account the expected dividend for the year 1967, he raised the value to Rs. 196-50 a share. Taking the normal yield from such companies at 8 per cent he valued the shares on yield basis at Rs. 250 a share, as it stood on 31-12-1966 before the declaration of Bonus Shares. He computed the value of Rs. 178-57 a share after the declaration of Bonus Shares. Averaging the two values, one on the basis of break-up value and the other on yield basis, the Assistant controller valued the shares at Rs. 159-41 a share.

( 4 ) BEFORE the Appellate Controller, it was urged by the accountable person that the assistant Controller was not justifited in adding the value of goodwill to the value of the net assets of the company while determining the value according to the break-up method as Rule 1d of the Wealth Tax rules, 1957 referred to above does not require the. goodwill value to be taken into account. The Appellate Controller did not decide that question. In his opinion the correct market value of the shares should have been ascertained with reference to the Balance Sheet of the company as at 31-12- 1967. After allowing 15 per cent discount as provided under Rule 1d, he valued the shares at Rs. 159-60 per share. As the said valuation approximated the valuation adopted by the Assistant Controller and the difference being negligible, he confirmed the assessment made by the Assistant controller.

( 5