9911796707
|
Home
Issues involved: Challenge to reopening of wealth-tax assessments for the assessment years 1982-83 to 1991-92 based on the application of Cost Inflation Index.
Summary: The writ petitioner contested the reopening of wealth-tax assessments for the years 1982-83 to 1991-92 concerning a property in New Delhi. The respondent applied the Cost Inflation Index to determine that the property's value was under-assessed in previous years. The petitioner argued that assessments were completed with due particulars and appeals were made in some years. The primary issue was the application of the Cost Inflation Index by the Wealth-tax Officer to assert that wealth had escaped assessment due to undervaluation. The Cost Inflation Index, used for capital gains tax computation, should only be applied to future values, not retroactively. Reversing the index's operation to calculate past land values is deemed arbitrary and unfair. The Karnataka High Court decision highlighted the complexity of property valuation, emphasizing that factors influencing land values are multifaceted and not solely tied to the Cost Inflation Index. The judgment concluded that the reopening of assessments was flawed due to the irrational application of the Cost Inflation Index in a reverse manner. The writ application was successful, granting rules absolute and a permanent injunction as per the petitioner's prayers. The decision emphasized the need for a more reasoned approach in wealth-tax assessments, respecting the complexities of property valuation beyond simplistic index applications.
|
