9911796707
TMI Blog1967 (1) TMI 24X X X X Extracts X X X X X X X X Extracts X X X X ..... f this case, the Appellate Tribunal was justified, while assessing the petitioner to wealth-tax under section 7(2) of the Wealth-tax Act, in directing that the value of the fixed assets should be determined by deducting from the total value of such assets the normal depreciation allowed under the Indian Income-tax Act in addition to the depreciation shown in the balance-sheet or else, whether the said Tribunal should have taken the value as shown in the balance-sheet ? (3) Whether the Appellate Tribunal's interpretation of the words 'set up', occurring in clause (xxi) of sub-section (1) of section 5 of the Wealth-tax Act, is correct, and, consequently, whether, in the facts and circumstances of this case, the Appellate Tribunal's order of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct had been fixed on the basis of the normal wear and tear in those assets by user. The normal depreciation allowed should, therefore, be deducted in determining the block value of the assets. It is the written down value of the assets after deduction of the normal depreciation under the Income-tax Act that should be taken as the basis of valuation for the purposes of the Wealth-tax Act. " The result was that the assessee was permitted to claim by way of depreciation not only the sum shown in the balance-sheet but in addition the normal depreciation allowed under the Indian Income-tax Act minus the sum shown in the balance-sheet, so that the total depreciation allowed to it may be equal to the normal depreciation allowed under the Indian I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (2)(a) of the Wealth-tax Act, held that where the assessee himself has in his balance-sheet shown the net value of his assets at a certain figure, after deducting the amount shown as depreciation, that figure may be taken as correct unless the assessee convinces the authorities that the figure was not acceptable. To quote their Lordships' words: "It was open to the assessee to convince the authorities that the said figure was inflated for acceptable reasons; but it did not make any such attempt. It was also open to the Wealth-tax Officer to reject the figure given by the assessee and to substitute in its place another figure, if he was, for sufficient reasons, satisfied that the figure given by the assessee was wrong." The same view has bee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... against the decision of the Appellate Tribunal. During the pendency of the appeal and the cross-appeal the assessee paid the sum as bonus to its employees. But as it was challenging the right of the employees to claim that sum, it showed the said payment in its account as advance payment to the employees, such advance payment being in the nature of "debt due" thus became an asset. The Supreme Court reduced the amount of bonus by one-half and consequently the said sum of Rs. 7,89,611 became, in fact and in law, a mere advance payment by way of loan by the employer (assessee) to its employees. The department, therefore, claimed this sum as an asset. But on behalf of the assessee it was contended that that sum could never be recovered from th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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