Law:

Section:

Section 7 of Wealth-tax Act, 1957 - Valuation of assets - General - Assessment year 1957-58 - Whether where WTO adopts global valuation, method he has to take balance-sheet as basis and make such adjustments as may be necessary but this does not, mean that apart from values given in balance-sheet, power given to him to make necessary adjustments must, as a matter of course, compel him to adopt written down value or depreciation allowed under Income-tax Act - Held, yes - Whether written down value of asset under Income-tax Act at end of any particular year in every case is real value of that asset for purpose of Wealth-tax Act - Held, no FACTS The assessee company returned a total wealth of Rs. 24,16,488 and claimed a deduction of Rs. 18,14,564 towards the difference between the depreciation allowed under the Income-tax Act and the depreciation deducted by the assessee from the value of its assets according to the method of accounting followed by it. The WTO did not admit the claim of the assessee to deduct the aforesaid amount towards depreciation but he adopted the global valuation method under section 7(2)(a) by determining the net value of assets of the company as shown in the balance-sheet. The assessee's contention was that apart from the depreciation which had been deducted in computing the net assets for the purpose of the balance-sheet, it was entitled to a further deduction which was the balance of the amount remaining after the deduction of the depreciation from the total amount of the depreciation allowed by the income-tax authorities for the purpose of the written down value. This contention was rejected. The assessee appealed and the AAC also agreed with the WTO. The Appellate Tribunal, however, thought that under section 7(2)(a), in the case of a business for which accounts were maintained by the assessee regularly, the WTO has been given the discretion, instead of determining separately the value of each asset held by the assessee in such business, to compute the net value of the assets of the business as a whole having regard to the balance-sheet of such business as on the valuation date and make such adjustments therein as the circumstances of…

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