Judgment :- 1. Pursuant to the order of this Court the Income-tax Appellate Tribunal, Cochin Bench has referred the following question for the opinion of this Court: "Whether, on the facts and in the circumstances of the case, and on an interpretation of S.6 of the Gift-tax Act, 1958, the Tribunal is correct in law in holding that for the gift of the shares made by the assessee on 25-3-1971, the value fixed in the balance-sheet of the company as on 31-3-1970 should be taken as the proper value?" The question arises in connection with an assessment to gift tax during the assessment year 1971-72 for which the accounting year is that ending on 31-3-1971. During that period the assessee gifted some properties and the dispute here concerns only gift concerning 1000 shares in Nirlon Synthetic Fibres & Chemicals Ltd. These shares were gifted by the assessee on 25-3-1971 and this gift was returned for the year 1971-72 showing the value of each share as Rs.200/-. 2. The Gift Tax Officer was not prepared to accept the value so returned. He adopted Rs. 398.61 per share that being the value adopted for such shares in the Wealth Tax return for the same assessment year 1971-'72. Evidently this value of Rs. 398.61 shown in the Wealth Tax return was based on the balance sheet of the Company as on 31-3-1971. 3. The assessee appealed to the Appellate Assistant Commissioner, the contention being that the value should have been taken as Rs. 330/-per share, that being the value of each of the shares as shown in the balance sheet as on 31-3-1970 The contention of the Revenue evidently was that the balance sheet of 31-3-197! being nearer in point of time to the date of gift and particularly being only one week away from the gift the valuation of the shares as in the balance sheet of 31-3-1971 should be relied on in preference to the valuation in the balance sheet as on 31-3-1970. The Appellate Assistant Commissioner took the view that the profit for the year 1970-71 could not be determined any day prior to 31-3-1971 and therefore it was the value as in the previous balance sheet that should be reckoned for the purpose of determining the market value of the share. 4. The Revenue took up the matter before the Tribunal in appeal. 4. The Revenue took up the matter before the Tribunal in appeal. Noticing that the value of the property gifted must depend upon the value in the open market on the date of the gift the Tribunal took the view that the price which any buyer would offer would depend upon what he knew of the property which he had to buy and the 'Buyer would not be in possession of figures of profit as on 31-3-1971, for, he would only be aware of the information that the break-up value of a share in the balance sheet as on 31-3-1970 was Rs. 330/-per share. He would have assumed that the same dividend as of the previous year would be paid unless it be that he had special information as to the change in circumstances of the Company or in the profit earning of the Company during the year ended 31-3-1971. There being no such case and the shares being not those listed in the Stock Exchange during the relevant year the value as in the balance sheet on 31-3-1970 Was adopted by the Tribunal. As a consequence the Revenue's appeal was dismissed. It is in these circumstances that the question now referred to us arises. 5. Under S.6 of the Gift Tax Act, 1958 the value of any property other than cash transferred by way of gift is to be estimated as the price which in the opinion of the Gift Tax Officer it would fetch if sold in the open market on the date on which the gift was made. Shares are saleable in the open market and therefore sub-section (3) of S.6 would not apply. The value will have to be determined on the basis of what the shares would fetch if sold in a hypothetical market on the date of the gift, A shareholder would normally be in possession of information about the shares and whatever would be relevant as information is expected to be passed on by him to the prospective purchaser. The purchaser is expected to quote the price in the light of such information conveyed by an honest seller who offers his property for sale. The profit made by a Company is within the special knowledge of the company and the shareholders become aware of such profit only when the balance sheet and the profit and loss account is made available. The profit made by a Company is within the special knowledge of the company and the shareholders become aware of such profit only when the balance sheet and the profit and loss account is made available. Even the Company will not be able to say what the profit for the year is until the close of the year and if the valuation of the shares would depend on the profit earning by a Company information that would be available at any time to the shareholders would be only the figures relating to such profit earning on the last day of the year which has been completed and not on the last day of the year which is yet to close. The prof it the Company would make in the year ending on 31-3-1971 could not therefore be visualised by the shareholders on 25-3-1971 and therefore if a shareholder puts up his shares as an honest seller he will not be in a position to indicate any information concerning the profit that may be earned during the year ending 31-3-1971. The normal information that he would be possessed of and that he would be able to convey to a willing purchaser would be the value as on 31-3-1970 and that based upon the balance sheet and profit and loss account as on 31-3-1970. Maybe there are special circumstances within his knowledge which may go either to enhance the value of the shares or reduce their value. If a seller is honest one may expect him to communicate information about such special circumstances also Jo a willing buyer. But if there is no material to show that there was any special circumstances in a case there can be no assumption of communication of any material other than the position of the Company as on the last day of the previous year, in this case as on 31-3-1970, in regard to which there is balance sheet and profit and loss account. In other words in regard to a sale effected before the end of the year in the normal course the information available would be the material as to the financial position of the Company as on the last day of the previous, year. In other words in regard to a sale effected before the end of the year in the normal course the information available would be the material as to the financial position of the Company as on the last day of the previous, year. The position must necessarily be different in a case where what are sold is shares listed in the Stock Exchange in which case the value as quoted by the Stock Exchange on the date of a gift may be relevant. That is not five case and therefore the shares are to be treated just as any other property. It necessarily follows that the nearness of the date of the gift to 31-3-1971 in comparison to the date 31-3-1970 is irrelevant and is of no consequence at all. 6. The view that we have expressed here has been taken by the High Court of Gujarat in Commissioner of Gift-tax, Gujarat v. Executors and Trustees of the Estate of Late Shri Ambalal Sarabhai (100 I.T.R. 447). The High Court of Gujarat followed the decision of the House of Lords in Lynall v. Inland Revenue Commissioners ((1972) 83 I.T.R. 563). In the light of the above discussion we see no reason to take a view different from that taken by the Tribunal in regard to the question now referred to us. Therefore we answer the question in the affirmative, that is in favour of the assessee and against the Revenue. A copy of the judgment under the seal of the High Court and signature of the Registrar will be sent to the Incometax Appellate Tribunal, Cochin Bench.