Section 7(4) valuation rule treated as procedural and applied to pending wealth-tax assessments

Section 7(4) of the Wealth-tax Act, 1957 was treated as a procedural valuation provision, not a substantive charging provision, because section 3 alone imposes the tax while section 7 prescribes the method of valuation for assessment. On that basis, the provision was regarded as applicable to pending assessments, including assessments relating to earlier years. The Tribunal also noted supporting authority on allied valuation provisions and held that no referable question of law arose from its order. The issue was answered against the Revenue and in favour of the assessee.

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Issues: Whether section 7(4) of the Wealth-tax Act, 1957, inserted by the Finance Act, 1976, is procedural in nature and able to pending assessments, including assessments relating to earlier assessment years.

Analysis: The reference sought to reopen a question already concluded by direct authority. Section 3 of the Wealth-tax Act, 1957 is the charging provision, while section 7 only prescribes the method of valuation and therefore operates as machinery for assessment. The Tribunal also noted supporting authority treating section 7(4) and allied valuation provisions as procedural and applicable to pending proceedings. In that view, no referable question of law arose from the Tribunal's order.

Conclusion: The question was answered against the Revenue and in favour of the assessee; section 7(4) was held to be procedural and applicable to pending assessments.

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