TMI Blog1969 (8) TMI 3X X X X Extracts X X X X X X X X Extracts X X X X ..... 57 (hereinafter referred to as "the Act") against the judgment of the Calcutta High Court dated January 29, 1966, in Wealth-tax Matter No. 372 of 1961. The respondent is a company which is assessed to wealth-tax for the assessment years 1957-58, 1958-59 and 1959-60. In computing the net wealth of the respondent on the respective valuation dates the Wealth-tax Officer proceeded under section 7(2)(a) of the Act and included the full value of the fixed assets as shown by the respondent in the respective balance sheets without any adjustments, after rejecting its contention that the fixed assets should be assessed at their written down value as computed for the purposes of income-tax. In the assessment order for 1957-58 the Wealth-tax Office ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sets. On further appeal the Income-tax Appellate Tribunal held that it would be fair in the circumstances of the case, to adopt the written down value of the assets as value thereof for all the years under appeal. In the course of its order the Appellate Tribunal said: " Income-tax assessment depreciation is calculated upon the original cost in a scientific and systematic manner with due regard to the nature of the asset. Therefore, the written down value as determined in the income-tax assessment may be taken as the fair index of the net value of the business assets in most cases... It cannot however be laid down as an inflexible rule of law that in every case the written down value must be taken to be the net value of the business asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (a) where the assessee is carrying on a business for which accounts are maintained by him regularly, the Wealth-tax Officer may, instead of determining separately the value of each asset held by the assessee in such business, determine 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 making such adjustments therein as the circumstances of the case may require . . . . .." In Kesoram Industries Cotton Mills Ltd. v. Commissioner of Wealth-tax the appellant company had shown in its balance-sheet for the period ending March 31, 1957, the appreciated value on revaluation of its assets, after making certain adjustments, at Rs. 2,60,52,357 and had introdu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... date. But this rule in the case of a running business may often be inconvenient and may not yield a true estimate of the net value of the total assets of the business. The legislature has, therefore, provided in sub-section (2)(a) that where the assessee is carrying on a business for which accounts are maintained by him regularly, the Wealth-tax Officer may determine the net value of 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 the case may require. The power conferred upon the tax officer to make adjustments as the circumstances of the case may require is also for the purpose of arriving at the true value of the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n on the principle of Kesoram Industries case and the question of law should be answered in the manner stated by us in this judgment. But it is necessary to give certain effective directions in this case Section 27(6) of the Act requires the Tribunal, on receiving a copy of the judgment of the Supreme Court or the High Court as the case may be to pass such orders as are necessary to dispose of the case conformably to such judgment. This clearly imposes an obligation upon the Tribunal to dispose of the appeal in the light and conformably with the judgment of the Supreme Court. Before the Tribunal passes an order disposing of the appeal there would normally be a hearing. The scope of the hearing must of course depend upon the nature of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... late Tribunal is doing after the High Court has heard the case is to exercise its appellate powers under section 33 ....The shape that the appeal would ultimately take and the decision that the Appellate Tribunal would ultimately give would entirely depend upon the view taken by the High Court." This passage was quoted with approval by this court in Esthuri Aswathiah v. Commissioner of Income-tax. In the present case, therefore the answer we have furnished to the question in the reference means that the Appellate Tribunal must now, in conformity with the judgment of this court, act under section 27(6) of the Act, that is to say, dispose of the case after rehearing the respondent company and the Commissioner in the light of the evidence a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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