TaxTMI 
TaxTMI 
1981 (12) TMI 14
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....cepting those that are expressly exempted by the statute. Under the statutory definition of assets, a partner's partnership interest, as such, would also come into the reckoning as an asset, considered in itself. Under the scheme of the W.T. Act, the market value of each and every one of the assets of an assessee will have to be determined in order to arrive at the aggregate value of all his assets. The partnership interest as such, being an asset in itself held by a partner, must also be reckoned in terms of market value. How to determine the market value of a share in a partnership is governed by the W.T. Rules, 1957. Rule 2 of the Rules lays down what is familiarly known to accountants as " the break-up value method " for ascertaining the market value of the interest of a partner in a partnership. Under, this method, you focus your attention, first, to the assets of the partnership. You take the partnership assets and determine their market value. You then turn to the firm's debts, and aggregate their amounts. Deducting the firm's debts from the aggregate value of the firm's assets will give you the net worth of the firm's undertaking as such. To the figure of net worth of the p....
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....y the Valuation Officers are in violation of even the minimum requisites of a fair hearing laid down in s. 16A of the W.T. Act. The WTO had referred to the Valuation Officer (plant and machinery) the question of valuation of the plant and machinery of the four partnership firms. The complaint in these writ petitions is that reasonable opportunity was not granted to the petitioners to make their representations before that Valuation Officer as respects the valuation of spinning machines and other items of machinery. Another grievance is that another Valuation Officer, called the Valuation Officer, Valuation Cell (Unit-I) had drawn up his valuations of immovable properties without calling for objections and without hearing the petitioners, excepting in respect of one solitary item. The contention urged is that since the Valuation Officers have entered their valuations summarily and without following the statutory procedure, their orders are invalid, and the invalidity of the valuation orders vitiates the assessment orders which subsequently adopted these valuations. The legal contentions of the petitioners based on the natural justice argument have to be accepted on the very terms....
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....concerning items of immovable property do not fare better. The record shows that Unit II Valuation Officer of immovable properties passed orders valuing items of immovable property within his charge without issuing notice to the petitioners and without giving them a hearing. The Unit I Officer, who is a party to the writ petitions, gave notice in respect of one item of immovable property, but his order determined the valuation not only for that item, but for many other items for which the petitioners bad no notice. It is said, in extenuation, that the time-limits for the concerned wealth-tax assessments were fast drawing to a close, and hence the Valuation Officers had to either hustle the proceedings or dispense with the hearing altogether in order to enable the WTO to finish the assessments in time. We do not appreciate this excuse. Valuation Officers are under statutory duty to issue notice to the assessees, give them an opportunity to object to the proposed official valuation, examine the evidence pro and con tendered by the assessees, and give them a fair bearing before drawing up the orders of valuation. Section 16A does not say anything about the bar of limitation for ass....
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.... set aside, as whole, since in the matter of valuation of the petitioners' interests in the partnerships, what has to be arrived at fairly and correctly is the valuation of all the assets of the partnership concern as a whole. If there is procedural or other flaw in some of the components which make up the aggregate assets of the firm, that would distort the ultimate figure of valuation of the partnership interests as such. There is, therefore, no other way to set right or remedy the situation excepting to quash the valuations adopted in the assessment order as a whole. As a necessary consequence, all the assessments involved in the case of all the writ petitioners will also have to stand quashed. This result, however, should have no terrors for the Department, considering that the W.T. Act has provided for a safety-valve, especially from the bar of limitation, particularly in cases where the assessments are set aside by courts for some reason or other. Section 17A(4) lays down that the bar of limitation otherwise prescribed under the Act shall not apply to any assessment or reassessment made on an assessee in consequence of, or to give effect to, any direction contained in any ....