Law:

Section:

Section 7 of the Wealth-tax Act, 1957 - Valuation of assets - General - Assessment years 1957-58 to 1959-60 - Assessee claimed deduction of certain amount from book value of its depreciable assets on ground that depreciation had not been provided in books according to rates as provided in Income-tax Act but at rates less than that - WTO repelled said claim -Tribunal directed WTO that value of depreciable assets should be included in net wealth of assessee after allowing for normal depreciation as computed for purposes of income-tax assessments - Whether Tribunal was right in directing that value of depreciable assets should be included in net wealth after allowing for normal depreciation in place of balance sheet value - Held, yes - Whether however, Tribunal was not right in directing WTO to do so according to computation for purposes of income-tax assessment - Held, yes FACTS The assessee-company owned certain depreciable assets, to wit, buildings, plant and machinery. For the assessment years 1957-58 to 1959-60, the assessee claimed deduction of certain amounts from the book value of its depreciable assets on ground that depreciation had not been provided in the books according to the rates as in the Income-tax Act but at rates less than that. The WTO repelled the claim. On appeal, the assessee contended that the WTO should have taken the value of the depreciable assets, on the valuation date, at the rate computed for income-tax purposes and not at the balance-sheet value, because there should be some uniform basis under the Wealth-tax and Income-tax Acts. The AAC repelled the contention and confirmed the order of assessment. On further appeal, the Tribunal allowed the appeals, observing that assessee was not adequately providing for normal wear and tear of the depreciable assets in its accounts. The Tribunal, therefore, directed that the value of the depreciable assets should be included in the net wealth after allowing for normal depreciation in place of the balance sheet value. It further directed that same was to be computed as is done for the purpose of income-tax assessments. HELD Section 7(2)(a) gives to the WTO power to adopt the balance-sheet value…

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