Per Shri Prakash Narain, Accountant Member - The dispute in this appeal relates to the valuation of certain shares held by the assessee. Some of the shares were quoted at different stock exchanges and were showing different rates. In many cases, the assessee valued them at the lowest quotation. The ITO, however, held that they required to be valued at the highest quotation at any stock exchange in the country.
2. The assessee appealed to the AAC. The latter, following a circular of the Board, directed the WTO to adopt the rate as shown at the nearest stock exchange. In the case of the assessee, the nearest stock exchange happened to be Delhi. The AAC, therefore, directed the WTO to adopt the rates of Delhi stock exchange. He further observed that if a share was not quoted at Delhi stock exchange, then the rate at Calcutta stock exchange could be adopted. He gave the date of the Boards Circular as 11-5-1959.
3. The learned departmental representative pointed out that the AAC was, in fact, intended to follow Boards Circular No. 3 (WT) of 1957 dated 28-6-1957, the relevant portion of which reads as under :
1. Valuation of shares and securities :
'(a) Share and securities on stock exchange : Shares in joint stock companies and securities issued by Government or local authorities which are the subject of dealings in recognised stock exchange may be valued on the basis of the closing price noted on the stock exchange, on the valuation date. For this purpose, if an assessee is assessed within a State in which there is recognised stock exchange, the price quoted on that exchange may be taken into account. However, if there is no recognised stock exchange in the State in which the assessee is assessed, the price quoted on the recognised stock exchange located in a State nearest to the State in which the assessee is assessed may be adopted. In either case, if no price is quoted on the valuation date (for example, when the exchange is closed for business for that day), the price on a date nearest to the valuation date may be adopted.'
He, however, pointed out that the above circular was not mandatory requiring the WTO to follow it in all cases. He argued that the circular contained only empowering provisions and it was always open to the taxing authorities either to follow it or not, depending upon the facts and circumstances of the case. To support his submissions he referred to the decision of the Bombay High Court in the case of H. J. Doshi v. CWT : 123ITR893(Bom) . He further contended that in the circumstances of the case, the highest rates in any stock exchange of the country were rightly taken by the WTO for valuing the shares held by the assessee.
4. We have carefully considered the submissions placed before us. Under section 7(1) of the Wealth tax Act, 1957, the value of any asset is to be estimated to be the price which, in the opinion of the WTO, it would fetch if sold in the open market on the valuation date. We have, therefore, to find out the open market. Normally, it should be the market nearest to the assessees place. In our opinion, therefore, the instructions of the Board as quoted above are in accordance with the above section of the Act. The Bombay High Court is the cited case has, no doubt, said that the instructions of the Board are not mandatory but of empower nature which could also be ignored by the assessing authorities depending upon the facts and circumstances of a particular case. No. special facts or circumstances have been pointed out to us to ignore them or to adopt the valuation with reference to the rates quoted on those stock exchanges which are far away from the assessees place. Normally, an assessee would like to dispose of his assets in the nearest market which in the case of the shares is a recognised stock exchange. We are, therefore, in agreement with the finding of the AAC that the rates quoted at Delhi stock exchange should be adopted for valuing the assessees holdings or in the absence thereof the rates quoted at Calcutta stock exchange may be taken into consideration.
5. In the result, the appeal is dismissed.