1973 (2) TMI 12

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..... on the basis of their book value on December 29, 1959, and October 19, 1960, respectively. The value of the shares as furnished by the assessee had been originally accepted by the Wealth-tax Officer. Later, the Wealth-tax Officer, in the proceedings for assessment for the year 1961-62 did not accept the value of the shares returned by the assessee on the basis of their book value, but adopted the actual market value as the basis of valuation. The result was while the net wealth furnished by the assessee for that year based on the book value of the shares was Rs. 15,57,068, the net wealth as determined by the Wealth-tax Officer on the basis of the market value of the shares came to Rs. 20,33,117. At that stage, the Wealth-tax Officer took t .....

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..... tion 7(2) for valuing the shares, he cannot change his opinion and seek to value the shares under section 7(1). According to the Tribunal, the Wealth-tax Officer having earlier exercised his discretion to proceed on the basis of section 7(2) by adopting the book value of the shares, which constituted the business assets of the assessee, he cannot by invoking section 17(1)(b) seek to adopt the alternative method provided for in section 7(1). The Tribunal, therefore, held that the Wealth-tax Officer was not justified in reopening the assessments under section 17(1)(b) and revaluing the shares by adopting a different method. At the instance of the revenue, the following question has been referred : " Whether, on the facts and in the circumsta .....

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..... d counsel for the revenue would contend that section 7(2)(a) will apply to the valuation of the assets of a business run by a partnership, and not of the assets of a business run by an individual. The learned counsel refers to section 7(2)(b), where reference has been made to a company carrying on business. But we are of the view that the said contention has to be rejected outright. Section 7(2)(a) refers to " asset held by the assessee in such business ", and the word " assessee " has to be understood as including an individual, a firm or association of persons. Section 7(2)(a) runs as follows : " Notwithstanding anything contained in sub-section (1),- (a) where the assessee is carrying on a business for which accounts are maintained by .....

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