TMI Blog1999 (11) TMI 37X X X X Extracts X X X X X X X X Extracts X X X X ..... ner carries on business in the name of Lala Kashi Nath Seth jewellers. Writ Petition No. 423 of 1986 challenges the notice issued by the Commissioner of Wealth-tax under section 25(2) of the Wealth-tax Act, 1957, proposing to revise the petitioner's assessments for assessment years 1982-83 and 1983-84. A copy of the notice dated March 10/14, 1986, is annexure 5 to the writ petition. It states that in the wealth-tax assessment of the assessee (petitioner), the capital balance of the firm, Lala Kashi Nath Seth jewellers and Kashi Nath Jewellery House, have been included in the assessable wealth as per balance-sheet and the assessee's share in the firm, Lala Kashi Nath Seth jewellers, Bareilly, has similarly been taken as per balance-sheet. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he respondents, these contentions are controverted and it is asserted that by virtue of rule 2B(2) and the decision of the Supreme Court, the Assessing Officer should have taken the market value of the assets of the aforesaid businesses and since this was not done, the assessments are erroneous and prejudicial to the interests of the Revenue. Writ Petition No. 315 of 1990, as stated above, is by the same petitioner and pertains to the assessment years 1985-86, 1986-87 and 1987-88. For these years, the Assessing Officer proposed to determine the market value of the business assets in terms of rule 2B and the petitioner rushed to this court and has filed this petition challenging the validity of rule 2B(2) on the same grounds as in Writ Pet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the joint Commissioner in exercise of the powers or in the performance of the functions of an Assessing Officer conferred on or assigned to him under orders or directions issued by the Board or by the Chief Commissioner or Director-General or Commissioner authorised by the Board in this behalf under section 120 of the Income-tax Act read with section 8 of this Act ; (b) 'record' shall include and shall be deemed always to have included all records relating to any proceeding under this Act available at the time of examination by the Commissioner ; (c) where any order referred to in this sub-section and passed by the Assessing Officer had been the subject-matter of any appeal filed on or before Or after the first day of June, 1988, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case of an asset on which no depreciation is admissible, its written down value ; (b) in the case of an asset on which no depreciation is admissible, its book value ; (c) in the case of closing stock, its value adopted for the purposes of assessment under the Income-tax Act, 1961, for the previous year relevant to the corresponding assessment year. (2) Notwithstanding anything contained in sub-rule (1) where the market value of an asset exceeds its written down value or its book value or the value adopted for purposes of assessment under the Income-tax Act, 1961, as the case may be, 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." Section 3 of the Wealth-tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rmine the net value 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 may be prescribed, instead of determining separately the value of each asset. Clause (a) of section 7(2) which is relevant is as under : "(2) Notwithstanding anything contained in sub-section (1),--- (a) where the assessee is carrying on a business for which accounts are maintained by him regularly, the Assessing 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 145 ITR 485, has held that the primary method of determining the value of the assets for the purposes of the Wealth-tax Act is the one indicated in section 7(1) in as much as it provides that the value of any asset other than cash shall be estimated to be its market value on the valuation date. It was also held that the method provided in the Act and the rules for adopting the balance-sheet value was not binding or conclusive. It is well known that the value of assets mentioned in the books of account may at times not be the real market value of the asset. In some cases the real market value may be more and in others, it may be much less. Therefore, it is open to both sides to take recourse to the real market value and so far as the Assess ..... X X X X Extracts X X X X X X X X Extracts X X X X
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