Wealth-tax valuation continuity: existing jewellery valuation remained operative, and a fresh report was not required after search.

Under the Third Schedule to the Wealth Tax Rules, jewellery and other assets are to be valued with reference to the valuation date, and the value fixed for one assessment year continues for the next four assessment years subject to specified adjustments. A fresh valuation is not required merely because a search has occurred unless the law itself mandates it. On the facts, the assessees could rely on the existing operative valuation report, so the later report was not to be adopted for wealth-tax purposes.

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Issues: Whether the Tribunal was right in directing the Assessing Officer to disregard the later valuation report and adopt the earlier valuation report for wealth-tax purposes.

Analysis: The valuation scheme under the Third Schedule to the Wealth Tax Rules requires jewellery and other assets to be valued with reference to the valuation date, and the value determined for one assessment year operates for the next four assessment years, subject to the specified adjustments. A fresh valuation is not compelled merely because a search has taken place, unless the law itself requires a new valuation. On the facts, the assessees were entitled to rely on the existing valuation that was still operative.

Conclusion: The issue was answered in favour of the assessees and against the Revenue.

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