Discuss the circumstances under which valuation of shares is necessary.

The necessity for valuation of shares arises inter alia in the following circumstances: Assessments under the Wealth Tax, Income Tax or Gift Tax Acts. Purchase of a block of shares which may or may not give the holder thereof a controlling interest in the company. Purchase of shares by employees of the company where the retention of such shares is limited to the period of their employment. Formulation of schemes of amalgamation, absorption, etc. Acquisition of interest of dissenting shareholders under a scheme of reconstruction. Compensating shareholders on the acquisition of their shares by the Government under a scheme of rationalisation. Conversion of shares, say, preference into equity. Advancing a loan on the security of shares. Resolving a deadlock in the management of a private limited company on the basis of the controlling block of shares being given to either of the parties.