K.S. Hegde, J. - (1.) Civil Appeals Nos. 1691-1692 of 1968 are by certificate and Civil Appeal No. 1075 of 1971 is by special leave. These appeals are brought by the Commissioner of Wealth Tax, West Bengal. In all these appeals we are dealing with the case of the same assessee, namely Aluminium Corporation Ltd. The relevant assessment years are 1957-58, 1958-59 and 1959-60 and the material valuation dates are 31-3-1957, 31-3-1958 and 31-3-1959. So far as the assessment of the assessee for the assessment year 1957-58 is concerned the matter had come up to this Court on an earlier occasion. This Court remanded the case to the High Court to decide the case afresh, if necessary after refraining the first question in the light of the principles enunciated by this Court in the order, of remand-see Commissioner of Wealth Tax, West Bengal v. Aluminium Corporation Ltd., [1970] 78 ITR 483(SC) . The High Court after expressing doubts about the competence of this Court to remand the case brought to this Court under the provisions of the Wealth Tax Act has answered the first question in favour of the Revenue. So far as the second question is concerned it has answered the same in favour of the assessee. As against that order the Department has brought Civil Appeal No. 1075 of 1971. The other two appeals relate to the assessment of the assessee for the assessment years 1958-59 and 1959-60. Here, the High Court has answered the first question referred to it in favour of the assessee and did not answer the second question.
(2.) The material facts in all these three appeals are more or less similar and for deciding the questions of law arising for decision, it is sufficient if we set out the facts as set out in the Statement of the case submitted by the Tribunal to the High Court along with the questions of law arising for decision in respect of the assessment of the assessee for the assessment years 1958-59 and 1959-60. From that Statement we get the following facts: The assessee company's fixed assets namely, land, buildings, plant and machinery were valued at Rs. 2,19,982/-, Rs. 36,13,906/-and Rs. 93,78,868/-respectively as on 31-3-1955. This valuation did not take into account depreciation for the year ending 31-3-1955 in respect of buildings, plant and machinery. A year later i.e. on 31-3-1956 the same assets were valued at Rs. 4,99,340/-, Rs. 1,08,40,840/-and Rs. 1,89,23,449/-. This valuation was also without taking into account depreciation for the year ending 31-3-1956 in respect of buildings, plant and machinery. The increase in the value of these assets, after making allowance for all additions made to the assets, was due to the revaluation of the assets made by the company before 31-3-56. The increase in value on account of revaluation was to the tune of Rs. 2,83,871/-, Rs. 72,31,204/-and Rs. 98,67,481/-in the case of land, buildings and machinery respectively. The Directors of the company in their annual report for the year ended 31-3-1956 noted that these assets had been revalued so as to indicate a true picture of their value and that evaluators had given due consideration to depreciation which the buildings, plant and machinery had been already subjected to. A corresponding capital reserve of an amount of Rs. 1,73,82,556/-was created against the increase in the value of the assets. The increase in the value of assets effected before 31-3-1956 was carried over to 31-3-1958 and 31-3-59, the relevant valuation dates and the capital reserve aforesaid continued to remain unaltered.
(3.) The company in submitting its return of wealth-tax as at the relevant valuation dates claimed before the Wealth-tax Officer that its lands, buildings and machinery should be valued according to the written down value as per income-tax records after allowing depreciation according to the Income-tax Act. According to the company the value of these assets should be respectively, Rs. 2,26,786/-Rs. 12,38,109/-and Rs. 11,46,979/-as at 31-3-1958 and Rs. 2,28,188/-, Rs. 13,64,198/-and Rs. 9,16,626/-as at 31-3-1959. These written down values were determined on the basis of the original cost as it stood before the assets were revalued in 1955-56. The Wealth-tax Officer in including these assets in the net wealth of the company, however, took the value thereof to be Rs. 5,10,657/-, Rs. 1,02, 53,392/-and Rs. 1,71,24,711/-as at 31-3-1958 and Rs. 5,12,059/-, Rs. 1,02,71,383/-and Rs. 1,65,02,524/-as at 31-3-1959 as shown in the company's balance sheets as at 31-3-1958 and 31-3-1959. The Wealth-tax Officer was of the view that the valuation of the assets having been made under Section 7(2) of the Wealth Tax Act, there was no need to analyses individually the value of particular assets. He also took the view that the value of the assets after revaluation was the correct one. He rejected the request of the company to make an allowance for the wear and tear of the assets even on the basis of the revised values for the period between the date of the revaluation of the assets and the Wealth-tax valuation dates.;