1996 (7) TMI 71 - HC - Income Tax

A Firm, A Partner, Assessing Officer, Income Tax Act, Reference To Valuation Officer, Wealth Tax Act

Summary

Issues:
1. Application for adjournment of writ petition.
2. Quashing of reference for valuation of properties.
3. Interpretation of section 16A of the Wealth-tax Act.
4. Legal validity of reference made by respondent.
5. Applicability of precedents cited by petitioners.
6. Jurisdiction under article 226 of the Constitution of India.

Analysis:
1. The judgment begins with the consideration of an application for adjournment of the writ petition due to one counsel being abroad. The court rejects the adjournment request, emphasizing that the presence of one available counsel is sufficient to proceed with the case, thus denying the application.

2. The petitioners sought to quash the reference made for the valuation of their properties. The court notes the denial of averments in the petition through a counter-affidavit. The petitioners' contention is based on the alleged contravention of section 16A of the Wealth-tax Act in the valuation process, arguing that no assessment proceedings were pending. However, the respondent justifies the reference under section 16A(1) and section 55A of the Income-tax Act, asserting the legality and validity of the valuation reference made by respondent No. 1.

3. The primary argument revolves around the interpretation of section 16A of the Wealth-tax Act. The petitioners claim that the valuation proceedings are prejudicial as no assessment proceedings were pending. In contrast, the respondent contends that the reference to the Valuation Officer is valid under section 16A, emphasizing the fair market value of assets as per the Act.

4. The court addresses the legality of the reference made by respondent No. 1 for valuation purposes. The respondent justifies the reference by citing the need to determine capital gains liability and deemed gift liability under relevant sections of the Income-tax and Gift-tax Acts. The court finds no legal infirmity in the respondent's actions, dismissing the petitioners' claims of the reference being arbitrary.

5. The court evaluates the applicability of precedents cited by the petitioners, namely, V. K. Jain v. WTO and Laxmi Devi Jain v. WTO. It concludes that these precedents do not align with the facts of the present case, rendering them irrelevant and unavailing to the petitioners' arguments.

6. Finally, the court determines the jurisdiction under article 226 of the Constitution of India. It finds the petition lacking merit and dismisses it accordingly, vacating the stay order issued earlier. The judgment affirms the legality of the valuation reference and upholds the actions of the respondents in the matter.