Market value on the valuation date governs wealth-tax valuation of plant and machinery, not written down value at year start.

For wealth-tax valuation, plant and machinery must be assessed at their market value on the valuation date under section 7 of the Wealth-tax Act, 1957. The relevant date is the end of the accounting year, so the asset cannot be valued by mechanically adopting the written down value as on the first day of that year without considering depreciation during the period. The Tribunal's approach was therefore rejected, and the valuation principle was applied in favour of the assessee.

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Issues: Whether, for wealth-tax purposes, the value of plant and machinery had to be taken at the written down value as on the first day of the valuation period or at the market value on the valuation date.

Analysis: Under section 7 of the Wealth-tax Act, 1957, the relevant test is the market value of the asset on the valuation date. The valuation date in the case was the date on which the accounting year ended, and the Tribunal was not justified in adopting the written down value as on the first day of the accounting year irrespective of depreciation during the year.

Conclusion: The question was answered in the negative and in favour of the assessee.

Ratio Decidendi: For wealth-tax valuation, plant and machinery must be valued at their market value on the valuation date, not by mechanically adopting the written down value at the commencement of the accounting year.

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