1977 (12) TMI 13

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....nce the following question has been referred to us at the instance of the Commissioner under s. 27(1) of the W. T. Act, 1957. " Whether the Tribunal was justified in allowing the assessee's claim for deduction on account of accumulated depreciation not written off in the books for the purpose of computing net wealth under s. 7 of the W. T. Act ? " A few facts may be stated. We are concern....

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....rce in the argument of the assessee that inability to provide for depreciation due to losses cannot result in increase in the wealth of the company. He found that, as a matter of fact, the assets were not fully depreciated and accordingly observed that it could not be denied that the assets appeared in the balance-sheet at inflated figures. He then considered what adjustment was required to be mad....

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....s not written off in the books of the assessee. During the course of argument, counsel for the revenue urged that where the assessee had not written down the value of the assets in its books, the value in the books should be taken for wealth-tax purposes and both the AAC and the Tribunal were not justified in allowing any adjustment for depreciation either fully on partially as has been done in....

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....t. To that extent the AAC was in error when he allowed the assets to be fully depreciated as this was a mere automatic application of the I. T. Rules and Schedule, which is not permissible. The Tribunal has revised this adjustment to some extent in favour of the department by allowing depreciation at normal rates but excluding double depreciation as included earlier. They have to a certain extent ....