1986 (7) TMI 61 - HC - Wealth-tax

Summary

Issues Involved:
The judgment involves a reference u/s 27(1) of the Wealth-tax Act, 1957 regarding the valuation of a residential house in accordance with rule 1 BB of the Wealth-tax Rules, 1957.

Valuation of Residential House:
The assessee initially declared the value of the residential house at Rs. 3,25,000 but later revised it to Rs. 58,450 based on rule 1 BB of the Wealth-tax Rules. The Wealth-tax Officer disagreed with the revised valuation and valued the property at Rs. 3,25,000. The Appellate Assistant Commissioner upheld this decision. However, the Tribunal considered rule 1 BB as procedural and applicable to pending assessments, directing the Wealth-tax Officer to determine the value of the house in question in accordance with this rule.

Legal Interpretation:
The High Court, after considering the arguments presented, agreed with the Tribunal's decision. They noted that rule 1 BB, although enacted after the assessment was completed, was procedural in nature. Citing a precedent from the Karnataka High Court, the court emphasized that the assessment proceedings were pending when the amended rule came into force, justifying the Tribunal's action in remanding the case for valuation based on rule 1 BB.

Conclusion:
The court answered the question referred to it in the affirmative and against the Revenue, supporting the Tribunal's decision to apply rule 1 BB for valuation. The parties were directed to bear their own costs in this reference.