1999 (3) TMI 27

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..... he assessee for valuing the closing stock only on the basis of gross profit rate declared by the assessee in the year ?" The relevant facts are that during the assessment year 1982-83, Smt. Gulab Devi, the assessee, was a partner in Jewels Emporium, M. I. Road, Jaipur, to the extent of 30 per cent. share. She returned her net wealth at Rs. 4,99,100 for that year. Her wealth comprised, inter alia, of her share in the aforesaid partnership firm. The said firm had valued its closing stock at cost and the gross profit for the accounting period as on the valuation date was Rs. 22,98,750. The Assessing Officer noted that the fair market value of the closing stock of the firm had been undervalued by Rs. 11,23,400. He accordingly applied the provi .....

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..... d the valuation disclosed by more than 20 per cent. The burden to prove such fact was on the Revenue. The Appellate Tribunal has categorically recorded a finding to the effect that such burden was not discharged by the Assessing Officer by bringing any evidence or material on the record of the case so as to justify the application of rule 2B(2) of the Rules. That is the condition precedent for applicability of rule 2B(2) of the Rules to a given case. It is the settled position of law that the condition precedent for applicability of rule 2B(2) has to be satisfied before applying that provisions to the valuation of closing stock of an assessee. This condition was not, undisputedly satisfied in the assessee's case. Hence, there was no justifi .....

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..... ets of the business as a whole is made under section 7(2)(a), having regard to the balance-sheet of such business, the Wealth-tax Officer shall make the adjustments specified in rules 2B, 2C, 2D, 2E, 2F and 2G of the Wealth-tax Rules. Rule 2B(2) lays down that where the market value of an asset exceeds its written down value or its book value or the value adopted for the purposes of assessment under the Income-tax Act, 1961, by more than 20 per cent. the value of that asset shall, for the purposes of rule 2A, be taken to be its market value. In other words, unless the determination of that market value on the basis of definite material is at an amount exceeding 20 per cent. of the value disclosed in the balance-sheet, no occasion arises for .....

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