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Interpretation of section 7(4) of the Wealth-tax Act, 1957 as procedural and retrospective. Analysis: The primary issue in this case revolved around the interpretation of section 7(4) of the Wealth-tax Act, 1957, specifically whether it was procedural and retrospective in nature. The provision in question, inserted by Act No. 66 of 1976, allowed for the valuation of a house used for residential purposes to be determined based on certain criteria. The court noted that this provision acted as an overriding mechanism over sub-section (1) of the Act, giving the Wealth-tax Officer the authority to estimate the price of an asset for valuation purposes. The court emphasized that section 7 is a machinery section that complements the charging section (section 3) of the Act. The court referred to the Gujarat High Court case of CWT v. Niranjan Narottam [1988] 173 ITR 693, which held that section 7(4) has retrospective operation and does not impair existing rights or obligations. Additionally, the court cited the Halsbury's Laws of England, which states the general rule against retrospective application of statutes unless expressly provided by the legislature. Furthermore, the court highlighted the decision in Gulabrai Hanumanbox v. CWT [1992] 198 ITR 131 (Gauhati), which deemed section 7(4) as procedural and having retrospective effect, applicable to pending assessments. The court clarified that the provision gives the assessee an option regarding property valuation, and if not exercised, the valuation would follow rule 1BB. In a related case, D.B. Income-tax Reference No. 107 of 1982--CWT v. Man Bahadur Singh [1994] 208 ITR 658, the court determined that rule 1BB, framed under section 7(1), is also retrospective and applies to pending assessments. The objective of these provisions was seen as simplifying valuation procedures and benefiting the assessee. The court concluded that since section 7(4) did not affect existing rights and was procedural in nature, it applied to all pending cases at the time of its enactment. Ultimately, the court upheld the Income-tax Appellate Tribunal's decision, ruling in favor of the assessee and against the Revenue, affirming that section 7(4) of the Wealth-tax Act is procedural and applicable to pending cases at the time of its implementation.
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