1991 (8) TMI 21 - HC - Wealth-tax

Summary

Issues Involved:
1. Applicability of section 7(4) to the assessment year 1975-76.
2. Exercise of option u/s 7(4) by the assessee.
3. Valuation consistency with co-sharer.
4. Validity of reference to Valuation Officer u/s 16A.

Summary:

Issue 1: Applicability of section 7(4) to the assessment year 1975-76
The Tribunal held that section 7(4) of the Wealth-tax Act, 1957, being procedural, applies retrospectively, including to the assessment year 1975-76. The court agreed, stating that procedural laws are generally retrospective unless unjust results arise. Sub-section (4) of section 7, which provides a method of valuation, is procedural and thus applies to pending proceedings and appeals.

Issue 2: Exercise of option u/s 7(4) by the assessee
The court examined whether the assessee exercised the option u/s 7(4) in time. It was held that the option could be exercised before the assessment order was passed, even if not specified in the return. The court found that the assessee's petition dated January 25, 1980, constituted a valid exercise of the option. Thus, the assessee was entitled to the benefits of section 7(4) for the assessment year 1975-76.

Issue 3: Valuation consistency with co-sharer
The court addressed whether the same property value determined for the co-sharer, Keshoram Radheyshyam, should apply to the assessee. It was held that assessing the same property at different values for co-sharers in the same assessment year violates the principle of equality under Article 14 of the Constitution. The court agreed with the Punjab and Haryana High Court's view in Jaswant Rai v. CWT and found the action of the assessing authority arbitrary and unjustified.

Issue 4: Validity of reference to Valuation Officer u/s 16A
Since the assessee validly exercised the option u/s 7(4), the reference to the Valuation Officer u/s 16A by the assessing authority was invalid. The court concluded that the valuation should be based on the option exercised by the assessee.

Conclusion:
All four questions were answered in favor of the assessee and against the Revenue. The court held that section 7(4) is procedural and applies retrospectively, the assessee validly exercised the option, the valuation should be consistent with the co-sharer, and the reference to the Valuation Officer was invalid.