G.G. Sohani, J. - (1.)BY this reference under Section 27(1) of the Wealth-tax Act, 1957 (hereinafter referred to as "the Act"), the Income-tax Appellate Tribunal, Indore Bench, has referred the following question of law to this court for its opinion ;
" Whether, on the facts and in the circumstances of the case the Tribunal was right in holding that the value of plant and machinery shall be taken at the written down value thereof as on the first day of the valuation period irrespective of the depreciation allowed during the year and the value of the addition, if any, made during the year shall be added thereto ?"

(2.)THE material facts giving rise to this reference, briefly, are as follows:
The assessee is assessed in the status of a Hindu undivided family and the assessment year in question is 1976-77, for which the accounting year ended on Diwali 1975. While framing the assessment for the assessment year in question, the Wealth-tax Officer assessed the value of the plant and machinery at Rs. 6.14,471 which was the written down value in the balance-sheet for the year preceding the previous year. On appeal, the Appellate Assistant Commissioner upheld the contention of the assessee that the value of the plant and machinery should be taken to be Rs. 5,40,242, which was the written down value in the previous year, as per the income-tax records. Aggrieved by the order passed by the Appellate Assistant Commissioner, the Revenue preferred an appeal before the Tribunal. The Tribunal held that the value of the plant and machinery should be taken to be the written down value on the first day of the valuation period. In this view of the matter, the Tribunal set aside the order of the Appellate Assistant Commissioner and upheld the order passed by the Wealth-tax Officer. Aggrieved by the order passed by the Tribunal, the assessee sought a reference and it is at the instance of the assessee that the aforesaid question of law has been referred to this court for its opinion.

Shri Chaphekar, learned counsel for the assessee, contended that the Tribunal erred in holding that the written down value of the plant and machinery in the year preceding the previous year would be the market value of the plant and machinery. It was urged that in view of the provisions of Section 7(2) of the Act, the Appellate Assistant Commissioner was right in directing that the value of the plant and machinery in question be computed at Rs. 5,40,242, which was the written down value as per the balance-sheet of the assessee for the previous year.

(3.)HAVING heard learned counsel for the parties, we have come to the conclusion that this reference has to be answered in the negative and in favour of the assessee. Under Section 7 of the Act, the market value of plant and machinery on the valuation date would be the value of that asset for the purposes of the Act. The valuation date in the instant case was November 3, 1975, when the relevant accounting year ended. The Tribunal, therefore, was not justified in holding that the value of the plant and machinery should be taken to be the written down value thereof as on the first day of the accounting year in question irrespective of the depreciation allowed during the year.
Our answer to the question referred to this court by the Tribunal is, therefore, in the negative and in favour of the assessee, In the circumstances of the case, parties shall bear their own costs of this reference.