A.K. Mathur, C.J.

1. This is an application under Section 26(1) of the Gift-tax Act, 1958 (for short "the Act"), at the instance of the Revenue and the following two questions of law have been referred by the Tribunal for answer by this court :

"(1) Whether, on the facts and in the circumstances of the case, the Assessing Officer was bound to value the cumulative redeemable preference shares of Simplex Castings (P.) Ltd., Bhilai, in accordance with Rule 10 of the Gift-tax Rules read with Section 6(3) of the Gift-tax Act, 1958 ?

(2) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in directing the Assessing Officer to value the 1000 cumulative redeemable preference shares of Simplex Castings (P.) Ltd. Bhilai, as per the yield method contrary to the specific provisions of Rule 10 read with Section 6(3) of the Gift-tax Act, 1958 ?"

2. During the previous year relevant to the assessment year 1985-86, the assessee gifted 1000 cumulative redeemable preference shares of Simplex Castings (P.) Ltd., Bhilai. In the return of gift, the assessee has returned the value of these shares on the basis of the yield method. While completing the assessment, th