Rule 1D valuation includes goodwill as an asset in the balance sheet, even though it is intangible.

Under rule 1D, the value of shares is computed by taking into account all assets shown in the company's balance sheet except where a specific exclusion applies. Goodwill, being an asset, does not fall outside the computation merely because it is intangible, and the explanation excluding amounts that do not represent asset value does not apply to goodwill. The contrary view that intangible assets are automatically deductible was rejected, and the departmental valuation including goodwill was restored in favour of the Revenue.

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Issues: Whether, for computation of the value of shares under rule 1D, the amount attributable to goodwill shown as an asset in the company's balance sheet was to be excluded from the value of assets.

Analysis: Rule 1D requires the value of all assets shown in the balance sheet to be taken into account, subject only to the specific exclusions provided in the Explanation. The exclusion for an amount shown in the balance sheet that does not represent the value of any asset did not apply to goodwill, because goodwill itself is an asset. The rule does not carve out intangible assets from the computation merely because they are not tangible. The contrary view that goodwill was deductible only because it was intangible was therefore incorrect.

Conclusion: Goodwill shown as an asset in the balance sheet was includible in the computation under rule 1D, and the valuation made by the Wealth-tax Officer was upheld in favour of the Revenue.

Final Conclusion: The appellate relief granted by the first appellate authority was reversed and the departmental valuation was restored.

Ratio Decidendi: Under rule 1D, all assets shown in the balance sheet are includible in valuation unless they fall within a specific exclusion, and goodwill, being an asset, is not excluded merely because it is intangible.

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