Sabyasachi Mukharji, J.
1. The assessment years involved in this reference are 1967-68, 1968-69 and 1969-70, for which the relevant previous years are the previous financial years. In the proceedings for assessment to tax, the ITO included the profit from the speculation transactions earned in the name of Kumari Shobhana Birla, minor daughter of the assessee, Sri K. K. Birla, in the total income of the assessee. The profits from the speculative transactions amounted to Rs. 8,267 in 1967-68, Rs. 5,375 in 1968-69 and Rs. 8,025 in 1969-70. The reasons were given by the ITO for this inclusion in the assessment order for the assessment year 1968-69. In the supplementary or subsequent assessment order passed for 1967-68 under Section 147(b) of the I.T. Act, the ITO included in the income of the assessee the speculation income which was declared in the personal return of the minor daughter with the following observations :
' As per finding in the assessment order of Kumari Shobhana Birla for the assessment year 1967-68, speculation income shown by the minor is held to be the income of the father and natural guardian, Shri K.K. Birla, who actually earned the income by using his skill and credit-worthiness.'
In the assessment order for 1968-69, income from share speculation in the name of the minor, Kumari Shobhana Birla, was included in the income of the assessee by the ITO with the following observations :
' Kumari Shobhana Birla is the minor daughter of Shri K. K. Birla, She had not attained the age of discretion during the relevant assessment year. She had a bank account of her name in her personal name and though she was below 14 was allowed to operate the account by the bank, During the year there was speculation in the shares of Orient Paper Mills Ltd. and M/s, Birla Jute Co. Ltd. through M/s. B. Newar & Co. On the point as to who issued instructions to enter into contract with the broker, it was confirmed by the representative that it was Shri K. K. Birla whoissued instructions. In the case of Kumari Shobhana Birla, the broker was summoned in the earlier year and he had confirmed that it was Shri K.K. Birla who issued instructions. Shri Newatia states that the facts of the case in the year are the same as in earlier year.'
It appears that the minor received the income as the amount was deposited in the bank account standing in her name and the amount was invested in the various firms in the name of the minor. In this connection, it would be necessary to refer to the facts as found by the ITO as well as the Tribunal. The ITO has further observed in the assessment year 1968-69 as follows:
' Kumari Shobhana Birla is the minor daughter of Shri K. K. Birla. She had not attained the age of discretion during the relevant assessment year. She had a bank account of her name in her personal name and though she was below 14 was allowed to operate the account of the bank. During the year there was speculation in the shares of Orient Paper Mills Ltd. and M/s. Birla Jute Co. Ltd. through M/s. B. Newar & Co. On the point as to who issued instructions to enter into contract with the broker it was confirmed by the representative that it was Shri K.K. Birla who issued instructions. In the case of Kumari Shobhana Birla, the broker was summoned in the earlier year and he had confirmed that it was Shri K.K. Birla who issued instructions. Shri Newatia states that the facts of the case in the year are the same as in the earlier year.
In the hands of minor, Kumari Shobhana Birla, the speculation income has not been accepted and it has been concluded therein that the speculation income disclosed actually is the income of Shri K. K. Birla by applying the following tests.
It is not denied that the minor has received income as the amount is deposited in the bank account standing in her name and the amount has been invested in the various firms in the name of the minor. But the receipt alone of an amount by an individual does not establish that a particular income is his income be claimed so as a matter of right because he has earned it either by applying his skill or capital or both. Only a man who has either employed his intelligence and/or labour and/ or capital in the earning of a particular income has got a claim over it. And this is the sole test to determine whether a particular income is of Mr. X or Mr. Y. By receipt of an amount one cannot say that because the amount has been received, so it is his income.'
The ITO was of the view that Sri K. K. Birla had utilized his skill in making this earning. Therefore, it was his income. It appears from the order of the AAC that it was established before him that the transactions were effected through various recognized stock brokers of the CalcuttaStock Exchange. The profits resulting from such transactions were received from the brokers by the account payee cheques drawn in the name of the minor and such cheques in all cases were directly credited in the savings bank account in the name of the minor with the United Commercial Bank, India Exchange Place, Calcutta. It is also recorded that the assessee did not at any point of time claim any right, title, interest or benefit of any such profits. It was also pointed out before the AAC that no fund belonging to the assessee was utilized in the speculative transactions. Indeed, it appears from the subsequent order of the Tribunal that the funds neither of the assessee nor of the minor were involved. In fact, no fund was involved in the speculative transactions. It was contended before the Tribunal that no part of the income from the speculation in shares earned for the benefit of the minor was enjoyed by Shri K.K. Birla as his income. The contracts were in the name of Kumari Shobhana Birla but the same were, however, entered into by the assessee as her guardian. From the orders of the ITO, the AAC and the Tribunal, the following facts emerge :--The speculation in shares of various well-known companies was entered into through registered stock brokers of Calcutta Stock Exchange and they have confirmed that the contract forms and all other documents relating to the speculative transactions were in the name of Kumari Shobhana Birla and they were signed by her father as guardian. It is common ground that no fund of the assessee was utilized in carrying on the speculation business.
2. Learned advocate for revenue urged that there was no positive evidence that any fund of Sri K. K. Birla was not utilized in carrying on speculation business. It would not be proper to say that it was common ground that no fund of Sri K. K. Birla was utilized in carrying on this speculation business. It might be strictly correct to say that it was not a common ground that no fund of the assessee was utilized in carrying on the speculation business. But, (1) there is no evidence either that any fund of Sri K. K. Birla was involved, (2) indeed it was stressed that in speculative transactions of this nature no fund was necessary or involved, (3) all the transactions involved on this aspect resulted in profit to the minor and there was no loss arising out of the transactions, (4) all the cheques in payment of the profits arising out of the speculation in shares were in the name of the minor, (5) evidence was produced to prove that these cheques were credited to the account of the minor in her savings bank account with the United Commercial Bank, India Exchange Place, Calcutta, and the assessee was authorised to operate the bank account even though she was aged about 14 years at the relevant time, and (6) it is also common ground that the amounts credited to her account were utilised for investment in her name and for her benefit and no part of theamounts received from speculation profits in the shares was enjoyed by her father, the assessee.
3. Upon these the Tribunal was of the view that these amounts arising out of the speculation shares could not be treated as the assessee's income. There was another aspect of the matter, namely, the addition of certain sums resulting from the dividends in respect of the shares of Birla Gwalior Pvt. Ltd., which was in the name of the wife. The question was whether these sums should be included in the income of the husband under Section 64(iii) of the I.T. Act, 1961. On this aspect, it appears that the assessee had acquired these shares prior to the years in question. Though, there is no evidence on record to show that these shares were acquired by the assessee, it was stated orally from the Bar that these shares were acquired by the assessee in the year 1959-60. For our present purpose, however, it is not relevant to proceed on that basis. The shares were transferred by the assessee to his wife during the assessment year 1960-61. It is also apparent that the shares were acquired by the assessee at a price of Rs. 4.12 for each share. These were transferred by the assessee during the assessment year 1960-61 at a price of Rs. 4.22 to his wife. It is also material in this connection to refer that the assessee was a director of a number of companies but after the coming into operation of the amendment of the Companies Act with effect from 20th of December, 1960, which put a ceiling upon the directorship of the companies for an individual, the assessee had to resign from the directorship of some of the companies. The assessee, therefore, wanted to unload his shareholding of M/s. Birla Gwalior Pvt. Ltd. of which he was a director. It also appears that under Section 43(a) of the articles of association of Birla Gwalior Pvt. Ltd., there were restrictions on the right of the transfer of the shares. Article 43 of the articles of association as well as Article 50 of the articles of association were as follows:
' A share may be transferred by a member or other person entitled to transfer to any member selected by the transferor.
Any share may be transferred by a member to any child or other issue, son-in-law, daughter-in-law, father, mother, brother, sister, nephew, niece, wife or husband of such member, and any share of a deceased member may be transferred by the executors or administrator to any child, or other issue, son-in-law, daughter-in-law, father, mother, brother, sister, nephew, niece, widow or widower of such deceased member and shares standing in the name of the trustee of the will of any deceased member may be transferred upon any change of trustees, to the trustees for the time being of such will. '
In that view of the matter, the ITO was of the view that the shares were transferred to his wife for an inadequate consideration and, therefore, the profits of the dividends arising from such transfer should be includible under Section 64(iii) of the I.T. Act, 1961. The Tribunal was, however, unable to accept this conclusion. The Tribunal referred to the decision of the Supreme Court and observed that the fair market price of the share had to be determined on the basis of the break-up value of the shares on the date of transfer and the Tribunal was of the view that there were restrictions on the transfer of shares and, secondly, in the immediately preceding year, the company had not declared any dividend. The Tribunal also noted that the assessee himself had purchased the shares at Rs. 4.12 per share and transferred those shares at Rs. 4.22 per share. In the premises, the Tribunal was of the view that it could not be said that the shares were transferred for inadequate consideration and, therefore, the income arising out of the shares could not be includible under Section 64(1) of the I.T. Act, 1961.
4. Upon these, the revenue wanted the Tribunal to refer the following questions under Section 256(1) of the I.T. Act:
'1. Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the income from speculation business in shares carried on by the assessee in the name of the minor daughter was not assessable in his hands ?
2. If the answer to question No. 1 is in the negative, then whether, on the facts and in the circumstances of the case, the dividend and bank interest, income arising from assets acquired out of the income from the speculation business carried on by the assessee in the name of his minor daughter, was not liable to be included in the assessee's income ?
3. Whether, on the facts and in the circumstances of the case, the Tribunal's finding that the shares of Biria Gwalior Pvt, Ltd. were transferred by the assessee to his wife for adequate consideration, was based no evidence or irrelevant evidence, or otherwise, unreasonable ?
4. If the answer to question No. 3 is in the affirmative then whether, on the facts and in the circumstances of the case, the Tribunal had misdirected itself in law in holding that the dividend income of Rs. 8,099 from shares of Birla Gwalior Pvt. Ltd. could be included in the total income of the assessee under Section 64(iii) of the Income-tax Act, 1961 ?'
The Tribunal, however, felt that two broad questions would settle the controversy in issue and as such the Tribunal has referred the two questions under Section 256(1) of the Act to this court which are as follows :
'1. Whether, on the facts and in the circumstances of the case, the Tribunal was right in excluding the income from speculation business and income from dividend and interest arising out of investment made from such speculation income, from the total income of the assessee ?
2. Whether, on the facts and in the circumstances of the case, the provisions of Section 64(iii) of the Act were not attracted in respect of the dividend income of the assessee's wife '
We have to concentrate our attention on two facts. Firstly, whether the income from speculation business, income from dividend arising out of investments made in such speculation business in the name of the minor can be includible in the assessee's income. We have set out the facts as found by the Tribunal. The legal, ownership of the profits from this speculation business belonged to the minor, the cheques were given in her name, credited in her account and it is also apparent from the findings that the beneficial enjoyment of the profit, that is to say, the benefit of that income accrued to the minor and was not enjoyed by the assessee. Therefore, both the legal ownership and the beneficial enjoyment of the profit belonged to the minor. In those circumstances, the only one conclusion that follows is what was apparent was real. No evidence to the contrary was adduced before the Tribunal. The Tribunal has negatived the contention that the assessee was carrying on business in benami of the minor. In our opinion, that was the only plausible conclusion possible. Furthermore, in any event, that conclusion of the Tribunal has not been challenged by any appropriate question as perverse or based on no evidence. In this connection reference was made to certain observations of the Division Bench of this court in the case of M. M. Metha v. CIT : 117ITR362(Cal) . There, as was noted, the transaction, on the facts and circumstances, if effected by the minors, would be illegal and the assessee had kept the fact that he was acting as a guardian of the minor secret. The assessee did not dispute that he was carrying on business in the name of the minor. The court in those circumstances noted that in that sense the transactions were 'admittedly benami'. If the assessee carries on business in the name of the minor then the income must be of the assessee. But here the facts are entirely different. Here the minor was carrying on the business as found by the Tribunal through the guardian, the father. The father was acting not for himself but as the guardian for and on behalf of the minor. In these circumstances, in our opinion, no other conclusion was possible than that was arrived at by the Tribunal. It was not argued before the Tribunal that the transactions were illegal. In any case the transactions could not be illegal. There is no law debarring a minor from entering into a contract through her guardian. Therefore, there was no prohibition on the minor entering into a contract in respect of speculative transactions through her lawful and natural guardian. In any event, in view of the provisions of the Hindu Minority and Guardianship Act, 1956, specially in view of sub-Section (3) of Section 8, it could not be said that the transaction in question would in any event be void. Even in case of transactions of immovable property which were not permitted by Section 8(3), these are voidable only at the instance of the minor and not at the instance of any other party including the revenue. In this connection, reliance may be placed on the observations of the Supreme Court in the case of Manik Chand v. Ramchandra, : 3SCR1104 . Quite apart from that, it has been observed by Keeton on the Law of Trusts, 9th Edn., p. 118, as follows :
' If a person has obtained money as agent or trustee of another, he cannot set up the fact that the money has arisen out of an illegal transaction as an excuse for its retention by him, and the same rule applies to an executor, whose testator has obtained the money illegally.'
Bowstead on Agency, 14th Edn., to which our attention was drawn, observed at p. 154 as follows :
'Even though the agent receives money for his principal in respect of a transaction which is void or illegal, the principal can sue his agent for money had and received. Thus if an agent is employed to make bets and he wins money, he must pay it over to the principal, although the betting transactions are themselves void ; similarly, if an agent is employed to sell shares, he cannot retain the money he receives by saying that the sale is illegal by Act of Parliament. But if the contract between the principal and agent is itself illegal, then the principal cannot recover any money received by the agent; the reason seems to be that since both parties are equally to blame, the court will not assist the plaintiff ; ex turpi causa non oritur actio. '
Similarly, in the illustrations, it has been noted as follows (p. 156):
'4. A turf commission-agent is employed to make bets. He must pay over to the principal the amount or any winnings actually received by him in respect of such bets, though the bets themselves are void by the Gaming Act, 1845, and though in consequence of the Gaming Act, 1892, he would not be able to recover from the principal the amount of any losses paid in respect of the bets.'
At one point of time we had some doubt whether under Section 64(1) there being a transfer of the skill of the assessee in carrying on the speculation business and the profits arising therefrom could be included in the income of the assessee. However, this aspect need not be examined in detail because the revenue or the authorities below have not examined this question from this point of view. Furthermore, on a closer examination of the aspect, it appears that there was no transfer of any knowledge as such. There was only performance of certain functions by the guardian which the guardian would have normally in a fiduciary capacity been obliged to do. In the premises, we are of the opinion that on the first aspect it cannot be said that the income of the minor from the speculation business could be included in the income of the assessee.
5. On the second aspect the question is mainly whether the shares of Birla Gwalior Rayon Co. were transferred for inadequate consideration bythe assessee to his wife. We have set out the necessary facts hereinbefore. How in a situation of this nature the shares should be valued has been examined by the Supreme Court in two decisions to which our attention was drawn. We may first refer to the observations of the Supreme Court in the case of CWT v. Mahadeo Jalan : 86ITR621(SC) . There the Supreme Court observed at p. 633 of the report as follows:
' An examination of the various aspects of valuation of shares in a limited company would lead us to the following conclusion:
(1) Where the shares in a public limited company are quoted on the stock exchange and there are dealings in them, the price prevailing on the valuation date is the value of the shares.
(2) Where the shares are of a public limited company which are not quoted on a stock exchange or of a private limited company, the value is determined by reference to the dividends, if any, reflecting the profit-earning capacity on a reasonable commercial basis. But where they do not, then the amount of yield on that basis will determine the value of the shares. In other words, the profits which the company has been making and should be making will ordinarily determine the value. The dividend and earning method or yield method are not mutually exclusive ; both should help in ascertaining the profit earning capacity as indicated above. If the results of the two methods differ, an intermediate figure may have to be computed by adjustment of unreasonable expenses and adopting a reasonable proportion of profits.
(3) In the case of a private limited company also where the expenses are incurred out of all proportion to the commercial venture, they will be added back to the profits of the company in computing the yield. In such companies the restriction on share transfers will also be taken into consideration as earlier indicated in arriving at a valuation.
(4) Where the dividend yield and earning method break down by reason of the company's inability to earn profits and declare dividends, if the set-back is temporary then it is perhaps possible to take the estimate of the value of the shares before set-back and discount it by a percentage corresponding to the proportionate fall in the price of quoted shares of companies which have suffered similar reverses.
(5) Where the company is ripe for winding up then the break-up value method determines what would be realised by that process.
(6) As in Attorney-General of Ceylon v. Mackie  2 All ER 775 (PC) a valuation by reference to the assets would be justified where as in that case the fluctuations of profits and uncertainty of the conditions at the date of the valuation prevented any reasonable estimation of prospective profits and dividends.
In setting out the above principles, we have not tried to lay down any hard and fast rule because ultimately the facts and circumstances of each case, the nature of the business, the prospects of profitability and such other considerations will have to be taken into account as will be applicable to the facts of each case. But, one thing is clear, the market value, unless in exceptional circumstances to which we have referred, cannot be determined on the hypothesis that because in a private limited company one holder can bring it into liquidation, it should be valued as on liquidation by the break-up method. The yield method is the generally applicable method while the break-up method is the one resorted to in exceptional circumstances or where the company is ripe for liquidation but none the less is one of the methods.'
It appears that there are two well-known methods of valuation. In the case of shares of private limited companies which are not quoted in the market, either the yield method or the break-up method is to be followed, though apart from this, other methods might be adopted to suit certain particular contingency. But normally these are the two recognised methods and which one of these two methods would be appropriate in a particular case must depend on the facts and circumstances of each case. Here we have noted that there are restrictions on transferring the shares as set out in the relevant provisions of the articles of association. We have further noted that there was no finding that the company was ripe for liquidation. The third factor is that the assessee had purchased these shares at a value of Rs. 4.12 per share. In this background and in the absence of any fact that after the purchase by the assessee and before the sale of the assets there was an enormous increase in the profits or in the assets of the company, in our opinion, the method followed by the Tribunal was the only appropriate method because no other method was even suggested by the Revenue or evidence to that effect adduced before the Tribunal. Learned advocate for the revenue sought to submit that the fact that there were restrictions on transferring the shares except to the members of certain close group was a factor which would enhance the value of the shares. In this connection he referred to the observations of the Supreme Court noted hereinbefore. This question was also examined by a Division Bench of this court in the case of CWT v. Bejoy Kumar Karnani : 117ITR543(Cal) . There the Division Bench of this court quoting the observations of the Supreme Court in the case of CWT v. Mahadeo Jalan : 86ITR621(SC) made it clear that in valuing the shares of a company for the purpose of assessment to wealth-tax, the break-up method was to be followed only in exceptional circumstances, that is where the company was ripe for liquidation. Now, learned advocate for the revenue sought to urge that this was not the only exceptional circumstance. To that extent learned advocate for the revenue, might be right. Hut it is true that the Supreme Court made it quite clear that the breakup method should normally be resorted to but the yield method should be preferred only in certain special circumstances. Here the revenue did not adduce any evidence of any special circumstance as such in the light in which the learned advocate for the Revenue sought to rely on the observations of the Supreme Court. The clause regarding restrictions on the transfer of shares as laid down in Article 50 of the articles of association, in our opinion, cannot be applied in the facts and circumstances of the case. As we have noted earlier, the question of asset-backing is a relevant factor to examine whether the yield method of a particular year was the result of fortuitous circumstances but was supported by sufficient assets. In this connection, reference may be made to the observations of the Supreme Court in the case of CGT v. Smt. Kusumben D. Mahadevia : 122ITR38(SC) and our attention was drawn to the observations at pages 46 and 47. In view of the facts as adduced before the Tribunal and in view of the matter that there was no alternative suggestion or no facts were indicated before the Tribunal, in our opinion, the Tribunal came to the correct conclusion in respect of the question whether Section 64(iii) was attracted on the question of dividend income of the assessee's wife.
6. In the premises, the question No. 1 referred to this court is answered in the affirmative and in favour of the assessee. Similarly, question No. 2 is answered by saying that the provisions of Section 64(iii) were not attracted to the facts and circumstances of this case.
7. In the facts and circumstances of this case, the parties will pay and bear their own costs.
Sudhindra Mohan Guha, J.
8. I agree.