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TMI Blog1977 (7) TMI 38X X X X Extracts X X X X X X X X Extracts X X X X ..... igures as they appear in the relevant balance-sheet or at their depreciated or written down values as determined by the income-tax authorities for income-tax purposes ? The assessee which is a textile mill, is a limited company and the question relates to the assessment year 1957-58, the relevant valuation date being December 31, 1956. It appears that in its balance-sheet as on December 31, 1956, the assessee-company had shown the value of its assets, namely, building, plant and machinery at Rs. 12,46,154 and Rs. 42,76,156, respectively. While returning its net wealth the assessee-company had returned the values of the building and plant and machinery, not at the figures in the relevant balance-sheet, but at figures which were less than t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ethod of showing the value of the assets in the balance-sheet. He pointed out that, in general, the value of the assets are shown in the balance-sheet in two different methods. One method was to show the depreciated value of the assets in the balance-sheet and the other was to show the book values subject to a depreciation fund which was shown as a liability on the liabilities side of the balance-sheet. However, according to the Appellate Assistant Commissioner even when the second method was followed, the depreciation fund may not be sufficiently provided for, in which event the assets would appear in the balance-sheet at inflated figures. According to him, that exactly had happened in the case of the assessee inasmuch as the assessee, in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the depreciated values of the assets which had been accepted by the Income-tax Officer for income-tax purposes, should be taken to be the value of the assets for wealth-tax purposes, no explanation whatsoever was offered by the assessee as to why in its balance-sheet as on December 31, 1956, the assessee-company had shown these assets at their book value and not the depreciated value and in the absence of any material being placed before the taxing authorities or the Tribunal, the Tribunal ought to have accepted the contention of the revenue that while adopting the global method of valuation under section 7(2)(a), the valuation as shown in the balance-sheet as on the valuation date should be accepted to be the value of those assets for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o decisions he contended that in the instant case beyond making a bald claim that the depreciated written down value of the assets which had been accepted by the Income-tax Officer for income-tax purposes should be the valuation of the assets for the purpose of wealth tax, no material had been placed before the wealth-tax authorities by the assessee-company to satisfy them that the valuation of the assets as shown in the balance-sheet as on December 31, 1956, was not quite correct or was on the high side, and in the absence of any such material being placed before the wealth-tax authorities, the Tribunal ought to have affirmed the Wealth-tax Officer's order and not the one that was passed by the Appellate Assistant Commissioner. We may po ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of valuation was adopted, then the depreciation as permitted under the Indian Income-tax Act had to be adjusted in order to determine the market value at the relevant valuation date and this was that the Tribunal had done in the case and the method adopted by the Tribunal was a correct one. At page 549 of the report, this court has categorically observed thus : " The ratio of the decision of the Supreme Court (Commissioner of Wealth-tax v. Aluminium Corporation of India Ltd. [1972] 85 ITR 167) cannot be attracted because this was not a case where the company bad chosen to revalue its assets ". As regards the contention of Mr. Joshi that no explanation was offered by the assessee-company nor any material was placed by the assessee-company be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plant and machinery in respect whereof a slightly higher book value was shown in the balance-sheet. It is thus clear that there was sufficient reason why depreciation to the extent of Rs. 2,22,000 which was claimed as and by way of adjustment while arriving at the valuation for the purpose of wealth-tax was not provided for in the balance-sheet as on December 31, 1956. In this view of the matter it is difficult to accept the contention urged by Mr. Joshi that no explanation or no material was placed before the wealthtax authorities to satisfy them that the valuation as shown in the balancesheet was not correct or was on the high side. In our view, the instant case would fall within the ratio of the decision of this court in Commissioner of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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