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TMI Blog1971 (8) TMI 7X X X X Extracts X X X X X X X X Extracts X X X X ..... t decision, the High Court was requested to give its opinion on two questions of law referred to it by the Income-tax Appellate Tribunal, " B " Bench, Calcutta. Following the decision of this court in Commissioner of Wealth-tax v. Ramaraju Surgical Cotton Mills Ltd. the High Court answered the second question against the revenue. That decision has become final. At present we are only concerned with the first question of law referred to the High Court for its opinion. That question reads : " Whether, on the facts and in the circumstances of the case, the sum of pound 8,54,948 was deductible in determining the net value of the assets of the assessee's business under section 7(2)(a) of the Wealth-tax Act ? " The assessee is a sterling co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Act. But he refused to grant the deduction claimed though he accepted the valuation of the assets as shown in the balance-sheet. Thereafter, the assessee went up in appeal to the Appellate Assistant Commissioner of Wealth-tax. The Appellate Assistant Commissioner allowed the appeal holding that as the Wealth-tax Officer has proceeded to assess the assessee under section 7(2), he must accept the balance-sheet as a whole. Hence it was impermissible for him not to allow the deduction shown in the balance-sheet. Ile, accordingly, deleted the amount added back by the Wealth-tax Officer. As against that order, the department went up in appeal to the Income-tax Appellate Tribunal. The Tribunal held that although the entire undertaking of the co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etermined.--(1) Subject to any rules made in this behalf, the value of any asset, other than cash, for the purposes of this Act, shall be estimated to be the price which in the opinion of the Wealth-tax Officer it would fetch if sold in the open market on the valuation date. (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 Wealth-tax 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 adjustments therein as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e having regard to the balance-sheet of such business as on the valuation date. In other words, section 7(2) authorises the Wealth-tax Officer to accept the valuation of the assets of a business as shown in the balance-sheet of the company. He is not bound to accept any deduction shown in the balance-sheet if he comes to the conclusion that the said deduction was impermissible. Section 7(2) does not say that the Wealth-tax Officer should accept the balance-sheet as a whole or reject it as a whole. He is merely authorised to accept the value of the assets of the business as shown in the balance-sheet. In the present case, the Wealth-tax Officer has accepted the value of the assets of the business as shown in the balance-sheet. But he has not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vides for the determination of the purchase price on revocation of licence under section 4. Whenever a licence of a licensee under the Indian Electricity Act is revoked under section 4, it is open to the State Government to acquire the undertaking itself or to direct the licensee to sell the undertaking to one or the other of the authorities or persons designated therein. When a sale in pursuance of such a direction is effected, valuation of the undertaking is made in accordance with section 7A. Section 7A reads : " 7A. (1) Where an undertaking of a licensee, not being a local authority, is sold under sub-section (1) of section 5, the purchase price of the undertaking shall be the market value of the undertaking at the time of purchase o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the date of delivery of the undertaking, may determine. (4) Where an undertaking of a licensee is purchased under section 6, the purchase price shall be the value thereof as determined in accordance with the provisions of sub-sections (1) and (2): Provided that there shall be added to such value such percentage, if any, not exceeding twenty per centum of that value as may be specified in the licence on account of the compulsory purchase." It is true that in view of section 7A(2) of the Electricity Act, in computing the market value of the undertaking sold under sub-section (1) of section 5 of that Act, the value of service lines which had been constructed at the expense of the consumers will not be taken into consideration. The r ..... X X X X Extracts X X X X X X X X Extracts X X X X
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