Limitation & restriction should be considered for valuation of shares for gift tax: SC

Deputy Commissioner of Gift Tax Vs BPL Limited (Supreme Court of India)

Supreme Court held that the valuation of shares for the purpose of gift tax needs to take into consideration the limitations and restrictions.

Facts-

The issue raised in these appeals relates to the valuation of 29,46,500 shares of M/s. BPL Sanyo Technologies Limited and 69,49,900 shares of M/s. BPL Sanyo Utilities and Appliances Limited, which were gifted by the respondent-assessee, M/s. BPL Limited, to M/s. Celestial Finance Limited on 2nd March 1993. The shares of M/s. BPL Sanyo Technologies Limited and M/s. BPL Sanyo Utilities and Appliances Limited, both public limited companies, were listed and quoted on the stock exchanges. However, these gifted shares, being promoter quota shares, allotted to the assessee on 17th November 1990 and 10th July 1991, were under a lock-in period up to 16th November 1993 and 25th May 1994.

Conclusion-

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