JUDGMENT :

A.M. Ahmadi, J.

The Wealth-tax Act, 1957 (hereinafter called " the Act "), was enacted to provide for the levy of wealth-tax and came into force with effect from April 1, 1957. The charging provision, section 3, provides for the levy of wealth-tax in respect of the net wealth of every individual, Hindu undivided family and company at the specified rates. The expression " net wealth " is defined in section 2(m) as the amount by which the aggregate value computed in accordance with the provisions of the Act of all the assets, wherever located, belonging to the assessee on the valuation date, including assets required to be included in his net wealth as on that date under the Act, is in excess of the aggregate value of all the debts owed by the assessee on the valuation date other than debts exempted by section 6, debts which are in the nature of encumbrances on any property which is not chargeable under the Act or the amount of tax, penalty or interest payable pursuant to an order passed under the Act or any other law relating to taxation. Section 4 enumerates the assets to be included in computing the net wealth. Sections 5 and 6 exempt certain assets in India and outside India from being included in computing the net wealth of the taxpayer. The value of assets is to be determined in accordance with section 7, sub-section (1) whereof reads as under :

"7. (1) Subject to any rules made in this behalf, the value of any asset, other than cash, for the purposes of this Act, shall be estimated to be the price which in the opinion of the Wealth-tax Officer it would fetch if sold in the open market on the valuation date."

2. The words " subject to any rules made in this behalf " were substituted by the Wealth-tax (Amendment) Act, 1964, with effect from April 1, 1965. Sub-sections (2), (3) and (4) of section 7 are in the nature of exceptions to sub-section (1) and each one of them begins with a non obstante clause, viz., notwithstanding anything contained in sub-section (1). Sub-section (2) deals with the manner in which the assets of an assessee carrying on business in respect whereof regular accounts are maintained or a nonresident company are to be computed. We are not concerned with this sub-section but sub-sections (3) and (4) of section 7 are relevant for our purpose and may, therefore, be reproduced :

"(3) Notwithstanding anything contained in sub-section (1), where the valuation of any asset is referred by the Wealth-tax Officer to the Valuation Officer under section 16A, the value of such asset shall be estimated to be the price which, in the opinion of the Valuation Officer, it would fetch if sold in the open market on the valuation date or, in the case of an asset being a house referred to in sub-section (4), the valuation date referred to in that sub-section.

(4) Notwithstanding anything contained in sub-section (1), the value of a house belonging to the assessee and exclusively used by him for residential purposes throughout the period of twelve months immediately preceding the valuation date may, at the option of the assessee, be taken to be the price which, in the opinion of the Wealth-tax Officer, it would fetch if sold in the open market on the valuation date next following the date on which he became the owner of the house or on the valuation date relevant to the assessment year commencing on the 1st day of April, 1971, whichever valuation date is later."

3. Section 14 enjoins every person, if his assessable net wealth on the valuation date is of such an amount as to render him liable to wealth-tax, to furnish a return in the prescribed form. On receipt of the return, the Wealth-tax Officer may make a provisional assessment under section 15C or proceed to make a final assessment in accordance with section 16 of the Act. According to that section, if the Wealth-tax Officer is satisfied that the return made by the assessee is correct and complete, he may finalise the assessment accordingly; otherwise he may after giv