1987 (3) TMI 59 - HC - Income Tax

Summary

Issues:
1. Interpretation of section 24(6)(a) of the Wealth-tax Act, 1957 regarding the valuation of immovable property.
2. Validity of the valuation report submitted by the assessee.
3. Determination of correct valuation of properties for assessment years 1957-58 to 1959-60.

Analysis:
The judgment delivered by the High Court of BOMBAY involved a reference under the Wealth-tax Act, 1957, initiated by the assessee, raising a question regarding the correct valuation of properties for the assessment years 1957-58 to 1959-60. The assessee did not file wealth-tax returns for the mentioned years, leading the Wealth-tax Officer to estimate the net wealth at Rs. 13,00,000 for each year due to non-compliance with notices issued under section 16. The Appellate Assistant Commissioner confirmed the valuation of immovable property at Rs. 10,20,000 but reduced the movable property valuation to Rs. 1,80,000.

Subsequently, the assessee appealed to the Income-tax Appellate Tribunal and submitted a valuation report valuing the immovable properties at Rs. 3,21,000. However, the Tribunal accepted the valuation of immovable property at Rs. 8,00,000, as initially shown by the assessee, leading to a dispute regarding the correct valuation. The Tribunal's decision was based on section 24(6)(a) of the Wealth-tax Act, which allows for a reference to valuers if the appellant objects to the valuation of any property.

The High Court analyzed the provision of section 24(6)(a) and concluded that the disputed value in question was whether the immovable property should be valued at Rs. 10,20,000 or Rs. 8,00,000. The Court emphasized that regardless of the valuation report, the immovable property's value could not be less than Rs. 8,00,000, the figure at which the assessee had initially valued it. Therefore, the Tribunal's decision to accept the assessee's valuation of Rs. 8,00,000 was deemed correct, and the valuation for the assessment years 1957-58 to 1959-60 was upheld at Rs. 8,00,000.

In conclusion, the High Court ruled that the valuation of immovable properties at Rs. 8,00,000 for the mentioned assessment years was correct, based on the interpretation of section 24(6)(a) of the Wealth-tax Act. The judgment did not award any costs to either party.