Law: Wealth Tax Act, 1957

Section: 7(1), (2)

Wealth tax- Company carrying on business and owning immovable properties-Valuation of immovable properties under 7(1) and other assets under S. 7(2) - Whether permissi ble-Proper method of valuation of the assets of a company Adjustments on account of depreciation-Deduction of income-tax liability-Wealth Tax Act, 1957, S. 7(1), (2). The assessee was a limited company engaged in the extraction of limestone and in share dealings and held immovable properties In the assessment of the company for wealth tax, the Wealth Tax Officer adopted the 'valuation of the properties of the company as mentioned in the balance-sheet under section 7(2)(a) of the Wealth Tax Act and refused to take into consideration the income-tax liability in determining the net wealth and to allow depreciation on the value of the assets as contemplated under the Income-tax Act. The Appellate Tribunal took the view that the house properties could not be the assets of the assessee's business of extraction of limestone and share dealings And should be valued under subsection (1) of section 7 and fixed their valuation as determined in the previous income-tax case of the assessee after making adjustments in respect of charges and taxes ; in determining the valuation of the land, the Tribunal based its decision partly on the valuation of the house as determined previously and partly on the valuation as given in the balance-sheet ; and with regard to the other fixed assets, the Tribunal determined the valuation under section 7(2) on the basis of the valuation given in the balance-sheet, and directed that the boob value of fixed assets should be so adjusted as to correspond with the written down value after taking ordinary depreciation for the years of use together with extra shifts where applicable, and that the income-tax liability of the assessee should also be, taken into account. On a reference on the application of the Commissioner of Wealth, Tax : Held, that the authorities are not authorised in the case of a company to proceed to determine the market value some items of the assets under subsection (1) of section 7 and with regard to the rest of the properties to fall back on section…