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Section 7 of the Wealth-tax Act, 1957, read with rule 2C of the Wealth-tax Rules, 1958 - Valuation of assets - Assets of business - Assessment years 1974-75 to 1978-79 - Whether goodwill, which is self-generated and not purchased for price and which does not find place in books of account, is not liable to be taken into account for determining net value of assets of business as a whole on a global basis and is not covered by rule 2C(d) - Held, yes CASE REFERRED TO Harshadkumar Natverlal Dalal v. CWT [1996] 219 ITR 592/ 86 Taxman 422 (Guj.) [Para 6]. P.P.S. Janarthana Raja, Subbaraya Aiyar and Padmanabhan for the Applicant. C.V. Rajan for the Respondent. JUDGMENT N.V. Balasubramanian, J. - The following common question of law, at the instance of the assessee relating to his assessment years 1974-75 to 1978-79, has been referred to this Court by the Income-tax Appellate Tribunal, Madras, for our opinion : "Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that goodwill, not purchased for a price but built up over a period of years, was liable to be taken into consideration in determining the net value of the assets of the business as a whole on a global basis and the value thereof is to be included having regard to the provisions of rule 2C of the Wealth-tax Rules, 1958 ?" 2. The assessee during the relevant previous years for the assessment years 1974-75 to 1978-79 was a partner in three firms of which S. Natesa Iyer and Co., was one. The firm, Natesa Iyer and Co., was constituted by a deed of partnership dated September 4, 1974, and the firm consisted of three partners, by N. Srinivasan, S. Jayaraman and B. Virdhagiri. On March 26, 1974, a deed of release was executed by one of the partners, by name, N. Srinivasan, who retired from the partnership firm from that date relinquishing all his right, title, shares and interest in the partnership firm in favour of other two partners, namely, S. Jayaraman and B. Virdhagiri, the assessee in the tax cases. In consideration of retirement of N. Srinivasan relinquishing his right, title, etc., the remaining partners agreed to pay on account of his capital, share and interest…

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