Revisionary jurisdiction under Wealth-tax law failed where partner's interest valuation followed binding beneficial circular and accepted valuation principles.

Revision under section 25(2) of the Wealth-tax Act was not justified where the assessee's valuation of a partner's interest in a firm followed a beneficial Board circular and the principle in Vasantha, under which the firm's assets had to be valued in accordance with the Wealth-tax Act and excluded assets were not to be included in net wealth. Because the revisional order departed from that accepted position and the facts were covered by the Special Bench view relied on by the assessee, the revisional order was set aside in favour of the assessee.

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Issues: Whether the Commissioner of Wealth-tax was justified in invoking revisionary jurisdiction under section 25(2) of the Wealth-tax Act, 1957 to direct fresh assessment by withdrawing the deduction allowed while computing the assessee's interest in the firm.

Analysis: The assessee's valuation was supported by the Board's accepted circular following the Madras High Court decision in Vasantha, which held that for computing a partner's interest under Rule 2 of the Wealth-tax Rules, the firm's assets had to be valued in accordance with the Wealth-tax Act and the relevant excluded assets were not to be included in net wealth. The order under revision conflicted with that accepted position. The Board's circular, being beneficial, was binding on the department, and the facts were also covered by the special Bench decision relied upon by the assessee.

Conclusion: The invocation of section 25(2) was not justified, and the revisional order was liable to be set aside in favour of the assessee.

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