Commissioner Of Gift Tax vs Gopal Srinivasan. on 17 January, 1994

Madras High Court
Commissioner Of Gift Tax vs Gopal Srinivasan. on 17 January, 1994
Equivalent citations: (1996) 130 CTR Mad 38
Author: Venkataswami


JUDGMENT

VENKATASWAMI, J. :

The following five questions which are identical in both the cases are referred to this Court : “1. Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that for determining the market value of the shares of M/s T. V. Sundaram Iyengar & Sons Private Ltd., gifted on 14th March, 1974, the proper balance-sheet to be taken was as on 31st March, 1973, and not the balance-sheet as on 31st March, 1974 ?

2. Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the provisions for gratuity should not be added back in arriving at the total assets of the company for the purpose of determining the break-up value of the shares ?

3. Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that a net deduction of Rs. 19 lakhs should be made from the total value of the assets of the company in relation to dividends to arrive at the break-up value of the shares ?

4. Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that a discount of 30 per cent should be given in arriving at the break-up value of the shares of the company in the present case ?

5. Whether, on the facts and in the circumstances of the case, the Tribunal was justified in examining the contentions raised by the assessee that discount higher than 15 per cent should be granted when the appeal before the Tribunal was an appeal by the Revenue ?”

2. The first question, which is common to both the cases is covered by a judgment of this Court in CGT vs. Venu Srinivasan (1985) 156 ITR 679 (Mad) according to which the balance-sheet, nearest to the date of gift, should be taken into account for valuing the assets gifted. As that has not been done by the Tribunal in this case, the matter has to be redone by the Tribunal in accordance with the abovesaid decision. Accordingly, we answer the first question in both the cases in the negative and against the assessee.

3. So far as the second question in both the cases is concerned, it must be answered against the Revenue, in view of the decision in (1984) 147 ITR 278 (Mad) and, accordingly, we answer this question in the affirmative and against the Revenue. In view of our answer to the first question, no answer is necessary for questions Nos. 3, 4, and 5 as the answer to those questions would depend upon the decisions to be rendered by the Tribunal for the first question.

Accordingly, we refrain from answering questions Nos. 3, 4 and 5.

No costs.

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