TMI Blog1968 (3) TMI 1X X X X Extracts X X X X X X X X Extracts X X X X ..... d circumstances of the case, the Appellate Tribunal was justified in holding that the value of the assets should be taken to be the written down value according to income-tax assessment, but so as to exclude therefrom initial and extra-normal depreciation and development rebate ? " The period for which the assessment has been made is the assessment year 1957-58 for which the valuation date is 31st December, 1956. The material facts appearing from the statement of the case are these : The assessee is a company which owned certain depreciable assets, namely, buildings, plants and machinery, etc. For the assessment year in question, the assessee-company valued these fixed assets at Rs. 31,29,197 in its return under the Wealth-tax Act. This ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ir report to the members stated that the balance-sheet of the company's affairs at the end of its financial year gave a true and fair value subject to adequacy of depreciation on fixed assets and, therefore, the balancesheet was a qualified one and must be read as such. In the circumstances, the assessee contended that the net value of the assets of the business should be determined having regard to the balance-sheet as on the valuation date and making such adjustment therein as the circumstances of the case required. According to it, the value of the assets should be taken to be the written down value according to the provisions of the Income-tax Act. The Wealth-tax Officer repelled the assessee's contention and proceeded to assess the n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r adjustment of the balance-sheet as provided in section 7(2)(a) of the Act and that the value of the assets should be taken to be the written down value according to income-tax purposes, but so as to exclude therefrom initial and extra-normal depreciation and developments rebate. Shri M. Adhikari, the learned counsel appearing on behalf of the Commissioner, contends that the Tribunal has misdirected itself by allowing adjustment in respect of depreciation as computed for income-tax purposes in the determination of the net wealth of the company. He urges that when the net value of the business of a company is determined by the Wealth-tax Officer under section 7(2)(a) of the Act, having regard to the balance-sheet, the valuation given in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the assessee. In view of the recent pronouncement of their Lordships of the Supreme Court in Kesoram Industries and Cotton Mills Ltd. v. Commissioner of Wealth-tax , it can no longer be contended that, when a global valuation is made under section 7(2)(a) of the Act, the valuation as given in the balance-sheet is conclusive of the matter. On the contrary, the Wealth-tax Officer is bound to consider on the material placed before him whether the figure shown in the balance-sheet was inflated for acceptable reasons in ascertaining the true value of the assets. Their Lordships, in that case, have stated : " It was open to the assessee to convince the authorities that the said figure was inflated for acceptable reasons; but it did not make ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t that the valuation given in the balance-sheet was not a true index of the real value of the assets. The Tribunal had, therefore, the right as well as the duty to make such adjustments, as the circumstances required. Now, no uncommon features are to be found in the case. There has never been any suggestion by the Commissioner that the plant and machinery are of a rare type or are of a quality which is not generally available in India for which there is a keen demand. That is the real criterion to be adopted in such cases. Thus, the Tribunal was not wrong in directing that the depreciable assets should be valued in the net wealth after allowing for their normal depreciation as computed for income-tax purposes. The Tribunal had before it the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tainty is not demanded, nor indeed, is it possible. It is for the commissioners to express in the money value attributed by them to the asset their estimate, and this is a conclusion of fact to be drawn from the evidence before them. " It stands to reason that the estimate of the Tribunal as regards the method of valuation to be resorted to is a matter of, its opinion. It cannot be contended, nor is it contended as a matter of law, that in each and every case, irrespective of the facts and circumstances thereof, all depreciation which is allowable for income-tax purposes, must be allowed in the computation of the total wealth. It must depend upon the facts and circumstances of each case. Nothing that we have stated should be taken as l ..... X X X X Extracts X X X X X X X X Extracts X X X X
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