2008 (4) TMI 152 - HC - Wealth-tax

Wealth tax non-acceptance of valuation of assessee - reference to the Valuation Officer - Wealth-tax Officer is bound to make a reference to the Valuation Officer if he did not agree with the report of the registered valuer relied upon by the assessee - provisions of section 16A(1), clause (b, mandatorily require the Wealth-tax Officer to make a reference

Summary

Issues:
1. Whether the Income-tax Appellate Tribunal was correct in holding that the assessee's figures supported by a valuation report of a registered valuer must be accepted?
2. Whether the sale consideration of one plot should be relevant for determining the valuation of an adjoining plot for specific assessment years?

Analysis:

Issue 1: The court addressed the question of whether the Assessing Officer could reject the valuation report of a registered valuer without referring the matter to the valuation cell of the Revenue. The court examined the provisions of Section 16A(1) of the Wealth-tax Act, which allows the Assessing Officer to refer the valuation of an asset to a Valuation Officer in certain circumstances. The court highlighted a circular issued by the Department, stating that in cases covered by Section 16A(1), it is mandatory for the Wealth-tax Officer to refer the valuation to the Valuation Officer and not decide the valuation independently. The court emphasized that this circular is binding on the Department, as established in previous judgments. The court held that the legislative intent was for the Wealth-tax Officer to refer the valuation to the Valuation Officer if there is a disagreement with the registered valuer's report. Therefore, the court answered the first question in favor of the assessee, emphasizing that the Wealth-tax Officer is obligated to refer the valuation to the Valuation Officer when necessary.

Issue 2: The court considered the relevance of the sale consideration of one plot in determining the valuation of an adjoining plot for specific assessment years. The court noted that this issue was consequential to the first question and would not arise if the first question was decided in favor of the assessee. The court did not delve into this issue extensively as it was deemed ancillary. Consequently, the court did not provide a specific answer to the second question, as it was considered secondary to the primary issue addressed in the judgment.

In conclusion, the High Court of Himachal Pradesh held that the Wealth-tax Officer must refer the valuation to the Valuation Officer if there is a discrepancy with the registered valuer's report, as mandated by the Wealth-tax Act and relevant circulars. The court dismissed the appeals, emphasizing the importance of following the prescribed procedures in determining asset valuations under the Wealth-tax Act.