Per Shri George Cheriyan, Accountant Member - The point at issue centres around the scope of Explanation II(ii)(e) to rule 1D of the Wealth-tax Rules, 1957 ('the Act'), which has been framed for computing the market value of unquoted equity shares of companies, other than investment com-panies, and managing agency companies. The appeal before us, which is by the revenue and in which the issue referred to emanates out of the assessment made in the case of Shri C.J. Sheth, individual, for the assess-ment year 1977-78. In this appeal, the computation of the market value of the shares of two companies are involved, i.e., (a) C.A. Galikotwala & Co. (P.) Ltd. ; and (b) Advance Paints (P.) Ltd. To zero down on the controversy, we would sot out, and discuss, the relevant statutory provi- sions, with reference to the figures relating to the balance sheet and profit and loss account of Advance Paints (P.) Ltd., which would be fully illustrative.

2. Where equity shares of a company are not quoted on a stock exchange, one of the methods for determining the market value is the break-up value method. This involves the determination of the 'net worth' of the com- pany, represented by, the exc