Law:

Section:

Section 7 of the Wealth-tax Act, 1957, read with rule 2 of the Wealth-tax Rules, 1957 - Valuation of assets - General - Assessment years 1983-84 to 1985-86 - Whether where once a rule is omitted and if it is a procedural in nature, in that event, its omission will not be germane to issue and shall in no way affect right or liability of parties since no one has any right to procedure - Held, yes - Whether since rule 2 of 1957 Rules and Schedule III to Act, which substituted rule 2, contained manners in which valuation was to be made, they were procedural in nature - Held, yes - Whether where once assessee claimed that rule 2 was inapplicable in respect of determination of valuation of partner's interest during subsistence of partnership, he could not claim any right under other part of rule that he was entitled to certain rights under said rule which was to be maintained - Held, yes - Whether department could not proceed on basis of rule 2 after its omission and, after introduction of Schedule III all pending matters were to be governed by Schedule III - Held, yes FACTS In the writ petition, it was contended by the assessee, inter alia, that since under the partnership law and partnership agreement net assets or net wealth of a firm, that is assets minus liabilities, is determined only once that is after the dissolution of the firm or on retirement or death of a partner where the partnership agreement so provides, during the subsistence of the partnership, the net wealth of a firm could not be determined and was not required to be valued. Therefore, rule 2 of 1957 Rules in so far as it required determination of the net wealth of the firm, was applicable only in a case where a firm has been dissolved. The said rule 2 also did not provide for the determination of partner's interest in the firm during the subsistence of the partnership and so long as the assessee continued to remain as a partner in the firm and the firm in question was not ripe for liquidation or had not been dissolved on the relevant valuation date. The assessee, thus, prayed for a declaration that rule 2 was inapplicable to his case and ultra vires in view of section 4(1)(b) of Act of 1957 and…

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