aforesaid appeals had come up for hearing before Tribunal and as Members of Bench were of opinion that issue involved, though it was subject-matter of decision in earlier years, required consideration by Special Bench, matter was referred to President of Tribunal for constitution of Special Bench and it is as result of order of President of Tribunal constituting Special Bench, these appeals have come up for hearing before us. 2. In case of each assessee excepting in case of Shri S. V. S. Chockalingam Chettiar, appeals involve three assessment years, viz., 1981- 82, 1982-83 and 1983-84. In case of Shri S. V. S. Chockalingam Chettiar alone appeals relate only to assessment years 1982-83 and 1983-84. single issue is involved in all appeals and this relates to valuation of unquoted shares held by each of four assessees in Abhirami Cotton Mills (P.) Ltd. claim of each of assessee was his shares should be valued at face value of Rs. 100 per share for reason that such was value which stood fixed in terms of memorandum and articles of association. 3. WTO did not accept claim but AAC accepted claim by relying on decision of Tribunal in case of V. S. Sivalingam Chettiar [WT Appeals Nos. 297 to 299 (Mad.) of 1983 dated 30-8-1983]. revenue appealed to Tribunal and at hearing learned counsel for assessee relied on another decision in case of Smt. V. S. SV. Meenakshi Achi [Reference Application Nos. 334 and 335 (Mad.) of 1985 dated 8-7-1985], wherein Tribunal by its order had rejected applications of revenue that higher value should be taken than face value, which, according to articles of association, were to be taken, in case of transfers. Bench before whom these appeals came up originally considered that matter required consideration by larger Bench. 4. Before us, learned departmental representative submitted that provisions of section 7(1) of Wealth-tax Act, 1957 required that market value of every asset should be determined. According to learned departmental representative it was settled law that whether asset was saleable or not, market value had to be determined. His submission, in short, was that merely because there were restrictive conditions in articles of association, plea of assessee that only face value should be taken, had no force. learned departmental representative took us through decision of Tribunal in case of V. S. Sivalingam Chettiar (supra), and submitted that decision of Madras High Court in case of R. Rathinasabapathy Chettiar v. CWT [1974] 93 ITR 555 had not been brought to notice of Bench and, hence, he stated that he would argue present case with reference to ratio of judgment of Madras High Court referred to, which, he submitted, was relevant for rendering proper decision. 5. In case of V. S. Sivalingam Chettiar (supra), in its order dated 30-8- 1983, Tribunal had set out relevant articles of articles of association, which placed restriction in matter of transferability. They are as under: "7. Save as aforesaid, person whether member of company or not (hereinafter called proposing transferor) who desires to transfer any share to any other person must serve company with notice in writing (hereinafter called transfer notice) that he desires to make such transfer. Such notice shall specify number of shares to be sold and shall constitute company as agent for sale of shares to any member of company or any other person willing to purchase shares (hereinafter called purchaser) at fair value fixed in accordance with clause 9 hereof. transfer notice may include several clauses of shares and in such case shall operate as if it were separate notice in respect of each. transfer notice shall not be revocable accept with sanction of directors. If company shall within space of 45 days after being served with transfer notice find purchaser and shall give notice thereof to proposing transferor, he shall be bound upon payment of fair value as fixed in accordance with clause 9 hereof to transfer shares to purchasing member. If in any case, proposing transferor after having become bound as aforesaid makes default in transferring shares company may receive purchase money and proposing transferor shall be deemed to have appointed any one director as his agent to execute transfer of share as purchaser and upon execution of such transfer, company shall hold purchase money in trust for proposing transferor. receipt by company of purchase money shall be good discharge to purchaser and after his name has been entered in register in purported exercise of aforesaid power validity of proceedings shall not be questioned by any person. If company shall not within space of 45 days after being served with transfer notice find purchaser in manner aforesaid, proposing transferor shall at any time within 90 days thereafter be at liberty subject to clause 8 hereof to sell and transfer shares not so placed to any person and at any price. 8. company in General meeting may make and from time to time vary rules as to mode in which any shares specified in any transfer notice shall be dealt with by directors in finding purchaser or purchasers. Until otherwise determined every such share shall as far as circumstances permit be offered to members in proportion of shares held by them on date of receipt of transfer notice, provided however where due to smallness of number of shares offered, such procedure could not be followed, directors may find purchaser in such manner if they think fit. 9. company in general meeting may from time to time and at least once year by resolution passed by majority of not less than three-fourth value of holders of class of shares concerned declare fair value of such shares to be thereafter dealt with. Such resolution shall be in force for such period as company in general meeting may determine. If at time when transfer notice is given any such resolution fixing fair value is in force fair value fixed thereby shall be deemed to be fair value of shares comprised in such share transfer notice. In event of such fair value not being fixed at time of transfer notice, nominal paid up value of share shall be deemed to be fair value." In short, main features of articles, were that where shareholder desired to transfer share notice had to be given to company specifying number of shares to be sold and company was to be constituted as agent for sale of shares, to any member of company or any other person willing to purchase same at fair value fixed in accordance with article 9. company had within period of 45 days after being served transfer notice to find purchaser and intimate transferor who was bound upon payment of fair market value fixed in accordance with clause 9 to transfer shares to purchasing member. Where transferor failed to do so, company was authorised to receive purchase money and transferor was deemed to have appointed any one of directors as his agent to execute transfer of shares to purchaser. On such execution, company was to hold purchase money in trust for transferor and receipt of purchase money would give good discharge to purchaser and his name was to be entered into register. Where company failed to procure purchaser within period of 45 days, proposed transferor was at liberty to sell or transfer share to any person at any price. Regarding fair price, it was privilege of company in general meeting to fix price from time to time and at least once year by majority of not less than three-fourth of members. Once value was fixed, till revision, such value would be in force. If at time when transfer notice was given there was no existing resolution, then value would be nominal paid-up value of share, i.e., face value. plea of assessee before earlier Bench was that fair value had not been fixed in general meeting and, therefore, face value alone should be taken. Tribunal eventually had taken view that value according to articles of association should be taken, but since there was no evidence that fair market value had not been fixed, Tribunal directed that this matter should be examined and value in terms of articles of association should be taken. 6. According to learned departmental representative, market value had to be determined and decision of Madras High Court in case of R. Rathinasabapathy Chettiar (supra) was clear authority for this proposition. H e submitted that Madras High Court had considered decision of Supreme Court in case of CWT v. Mahadeo Jalan [1972] 86 ITR 621 in arriving at this decision. He stated that Madras High Court in aforesaid case had only held that for restrictions in articles of association some discount would have to be given. In present case, his submission was that computation had to be made in terms of rule 1D of Wealth-tax Rules, 1957 and method adopted was break-up value method and already discount of 15 per cent was given from break-up value arrived at and no further deduction had to be given. 7. learned counsel for assessee submitted that on facts of present case he was not disputing proposition that if market value was to be fixed, then market value should be computed in terms of rule 1D. However, his submission was that in such event, discount of 15 per cent was given inadequate and much larger discount was called for. He submitted that main thrust of his argument was that since VS. Sivalingam Chettiar's case (supra) was not taken up further to High Court to best of his knowledge and as in case of Smt. V. S. S. V. Meenakshi Achi (supra), Tribunal had rejected application for reference, it should be considered that revenue was accepting view that where articles of association placed restrictive value, such restricted value alone should be taken and question of adopting market value did not at all arise. 8. We have considered rival submissions. Merely because earlier decision of Tribunal may not have been subject-matter of reference before High Court, that is not conclusive of what should be true legal position. As pointed out by learned departmental representative, decision of Madras High Court in R. Rathinasabapathy Chettiar's case (supra) was not brought to notice of Benches which decided issue earlier. We have been taken through decision of Madras High Court and we find that said decision squarely applies to facts of present case. There also valuation involved was of shares of company wherein articles of association 30 to 40 contained restrictive covenants. One article, i.e., article 33, had stated that sum find by transfer notice was to be Rs. 100 per share, which was face value. Madras High Court considered contention of assessee that shares should be valued only at face value because they were not at all saleable in market but did not accept said contention after referring to various judicial pronouncements, in particular, judgments of Supreme Court in Ahmed G. H. Ariff v. CWT [1970] 76 ITR 471 and Purshottam N. Amarsay v. CWT [1973] 88 ITR 417. Madras High Court also referred to decision of Supreme Court in CWT v. Mahadeo Jalan [1972] 86 ITR 621. They stated that Supreme Court had mentioned that there was no hard and fast rule for valuation of shares and yield method was generally no hard and fast rule for valuation of shares and yield method was generally applicable while break-up method was one resorted to in exceptional circumstances. On facts of that case, they stated that they saw no objection to adoption of break-up value method, but Court went on to hold as under: "...... If shares are sold in open market, purchaser will certainly take note of various restrictions contained in articles of association of company and offer only lesser price. It is for this reason Abraham v. Federal Commissioner of Taxation 70 CLR 23 suggested adoption of depreciated value wherever there are restrictions on transfer of shares as also on price. Therefore, value ascertained on basis of break-up method has to be depreciated to some extent having regard to restrictions contained in articles of association, which have tendency to bring down price in open market sale." (p. 562) 9. Looking to ratio of aforesaid decision, which is binding on us, it is clear that stand of learned counsel for assessee that only value stipulated in articles of association can be taken for wealth-tax purposes cannot be accepted. market value has to be ascertained in first instance. learned departmental representative pleaded that rule 1D should be applied in present case. learned counsel for assessee submitted that if market value was to be adopted, he had no objection to value of shares being computed in terms of rule 1D subsequent to appropriate discount. submission of learned departmental representative was that already after arriving at value by break-up value method, which was what was prescribed by rule 1D, 85 per cent of same was to be taken and, therefore, no further discount should be allowed. learned counsel for assessee on other hand, had submitted that for restrictions further discount was warranted. We find that rule 1D itself provides for lower percentages being taken than 85% in arriving at break-up method where there are special feature like non-declaration of dividends, etc., which, of course, does not arise in present case. Therefore, when market value is to be determined by break-up method, which is method prescribed under rule 1D, proper discount has to be given. discount given of 15 per cent, i.e., adoption of 85 per cent is normal discount given invariably in every case where break-up method is adopted. Where there are special restrictions, as in present case, larger discount would be warranted. We would, therefore, direct that in present case value of each share in Abhirami Cotton Mills (P.) Ltd. on each of valuation dates will be computed in terms of rule 1D, i.e., after allowing normal discount of 15 per cent applicable in all cases. Thereafter, with reference to value before allowing discount of 15 per cent, further discount of 25 per cent will be given in each case. Such value would be market value of share on respective valuation dates. WTO would recompute value of share on each of valuation dates in accordance with our aforesaid directions. 10. In result, all appeals are treated as allowed in part. *** WEALT-TAX OFFICER v. S.V. CHETTIAPPA CHETTIER