A.N.Sen, J. - (1.) This is a reference under Section 27(1) of the Wealth-tax Act, 1957.
(2.) The assessee, which happens to be the applicant herein, is a company and has three jute mills, namely. Central, Albion and Lothian. During the calendar year 1956, the assessee-company was also proposing to set up a plant for the manufacture of soda ash and ammonium chloride near Varanasi under the style " Sahu Chemicals". The assessment year in question is the year 1957-58 for which the relevant valuation date is December 31, 1956. The assessee filed a return disclosing net wealth of Rs. 1,40,818 as on 21st December, 1956. The assessee adopted the values of the plant, machinery and buildings at the written down value as per income-tax assessment, though the balance-sheet figures were much higher. The Wealth-tax Officer held that, in view of the defects involved in trying to value each asset it was not possible to resort to individual valuation of the assets and resorted to the " global valuation " of the assets, as permitted under Section 7(2) of the Act on the basis of the balance-sheet of the company as at 31st December, 1956.
(3.) The relevant provisions of Section 7 of the Wealth-tax Act, 1957, may be conveniently set out at this stage : "7. (1) 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 the circumstances of the case may require.";