common point in dispute in all these appeals is whether expenditure incurred on account of renovation and treated as capital expenditure in hands of firm could be added in hands of partner for purposes of valuing his interest in firm. It is accepted fact that all present assessees are partners in either of firms namely Laxmi Talkies or L.N. Talkies or both. WTO in all these cases observed that substantial amount of expenditure had been incurred by both firms on account of renovation and which had been treated as capital expenditure by ITO assessing firms. H e accordingly proceeded to and proportionate share of assessees as their wealth in profit sharing ratio. In course of hearing before AAC it was submitted that theatre buildings in respect of both firms were properties of HUF's of some of appellants and that these HUFs were not partners in firms. It was also submitted that firms did not belong to them. These arguments were however rejected by AAC on following grounds: (1) expenditure in question had resulted in enduring benefits to firms in which appellants were partners. (2) That this huge expenditure was in quick succession to large expenditure in earlier year. (3) That there was close relationship between HUF's owning cinema buildings and partners of firms and apparent was not real state of affairs. (4) That transaction of lease renewal every three years and massive renovation expenditure from year to year in respect of property let out to one's own kith and kin for rent of Rs. 3400- per month pointed to existence of subterfuge to evade tax. AAC on basis of above facts confirmed action of WTO i n adding to wealth proportionate share of assessees in respect of expenditure incurred by firms on renovation. In course of his arguments ld. Counsel reiterated most of submissions made before AAC. thrust of his argument was that firm were not owners but only lessees of properties. It was also urged that similar expenditure on renovation had been treated as on revenue account by Tribunal in respect of both firms for asst. yr. 1976-77. He thereafter referred to WT Rules, 1957 to contend that revenue expenditure was not 'asset' as referred to in rr. 2A to 2D. It was contended that WTO could not take recourse to any of aforesaid rules for purposes of working out value of interest in partnership. ld. D.R. in course of his arguments kly supported orders of AAC and WTO. It was submitted that assets under consideration (cinema buildings) were shown in Balance Sheets of firms. It was contended that revenue expenditure improved marketability of asset and made it better asset. It would accordingly increase in value as result of revenue expenditure in form of renovation expenses. According to him distinction between revenue and capital expenditure was only with view to deciding whether item of expenditure was to be allowed in full in one year or over few years in guise of depreciation allowance. In his reply learned counsel submitted that r. 2-C would not apply as it speaks of asset not disclosed in Balance Sheet. According to him determination of expenditure whether capital or revenue was to be done purely on accounting principles. We have examined rival contentions as well as perused material on record. It seems that point at issue has not been understood by rival parties. arguments advanced by two sides have proceeded on lines s to whether revenue expenditure in form of renovation, etc., can go to increase value of interest in partnership. This in fact is not case before us. What WTO has added in all these cases is proportionate share of renovation expenses which have been treated as capital expenditure in hands of firms by respective ITOs. ld. AAC has specifically ruled out any addition on account of revenue expenditure. His observations are as follows:- "4. It is seen that renovation expenditure carried out in asst. yr. 1976-77 by firms, M/s. L.N. Talkies and M/s. Laxmi Talkies has been treated as revenue expenditure by learned ITAT therefore so much of additions to interest of appellant in two firms as are attributable to renovation expenses incurred in asst. yr. 1976-77 cannot be sustained as same was treated as revenue expenditure by Tribunal". We further observe from orders of WTO that valuation of interest in partnership was returned as per global method, i.e. without adjustment of each asset held by firm. In other words assessee took recourse to provisions of s. 7(2)(a) of WT Act, 1957 which reads as follows: "7(2) (a) Where assessee is carrying on business for which accounts r e maintained by him regularly, WTO may, instead of determining separately value of each asset held by assessee in such business, determine net value of assets of business as whole having regard to balance sheet of such business as on valuation date and making such adjustments therein as may be prescribed." We now come to s. 2A of WT Rules, 1957 which is as follows: "2A. Where WTO determines under cl. (a) of sub-s. 7 net value of assets of business as whole having regard to balance sheet of such business he shall make adjustments specified in rules 2B, 2C, 2D, 2E, 2F and 2G." combined reading of aforesaid s. 7(2) (a) and Rule 2A clearly shows that where person stakes claim for having net assets of his business valued as whole on basis of balance sheet then WTO is entitled to make adjustments specified in r. 2B to 2G. rule to be applied in present case would be r. 2-B which speaks of adjustment in value of various assets disclosed in balance sheet. two firms in respect of which present assessees are partners have incurred substantial amount of expenditure on account of renovation. In fat in case of Laxmi Talkies CIT (A) in his order for asst. yr. 1977-78 has pointed out that assessees has incurred expenditure of Rs. 12.22 lakhs in two assessment years. We are not impressed with arguments advanced by ld. Counsel to effect that premises do not belong to firms in question since it has been found as fact that cinema buildings are owned by HUFs of assessees. It is also seen that huge expenditure has been incurred immediately after acquiring premises to lease, on 15th Feb., 1975. Actually what has to be decided is quantum of real taxable wealth. In present cases if firms had capitalised expenditure rather than charge it to Profit & Loss A/c then to that extent effect would have been reflected in figure of interest of each of partners in firms. However, as expenditure has been treated as of capital nature, value of various fixed assets in respect of which it has been incurred automatically stands increased to that extent. In case lease is terminated and premises go back to landlord (under normal circumstance) then lessee would definitely like to be compensated at market value for various fixed assets that they have purchased, altered or renovated in cinema buildings. According to us expenditure of lakhs would not be given up without corresponding compensation coming in. We would accordingly agree with AAC that capital expenditure incurred by two firms would form part of assessee's interest in firms for purpose of wealth-tax. We however hold that figure to be adopted would be depreciated value as on each valuation date and computed in accordance with IT Rules. We have also been informed by ld counsel for assessees that question whether renovation expenditure is capital or revenue has still not been finally settled and appeals are pending at various level including Tribunal in respect of two firms under consideration. It has also been stated that in case of Laxmi Talkies for asst. yr. 1977-78 CIT(A) has restored matter to ITO for re-examination as to whether expenditure is capital or revenue. We under these circumstances and in fitness of things deem it fit to restore point at issue to files of WTO in all cases. He is directed to decide issue subsequent to finalisation of matter as to whether expenditure is revenue or capital in nature. In light of this decision we do not pronounce on arguments advanced by both sides as to whether revenue expenditure on renovation can be added or not while computing partner's interest in firm. As regards other grounds in all appeal it has been contended by ld. Counsel that these had been argued before AAC but no decision was given while passing orders. He has also submitted before us photo copies of his applications to AAC seeking rectification of orders. In view of these, we do not pronounce on various grounds of appeal which are subject matter of rectification proceedings. We proceed to dismiss them in limine. As result, all appeals are partly allowed. *** VINUBHAI H. PANCHAL (HUF) v. WEALTH-TAX OFFICER