2017 (12) TMI 479 - AT - Wealth-tax

Market value of immovable property - adoption of the value determined by the Departmental Valuation cell - Held that - There is a search in the case of the assessee and subsequently it is found that there are some immovable properties and the assessee has to file a wealth tax return, which he was not filed. The A.O. has issued a notice, accordingly, assessee filed the wealth tax return and declared immovable properties as per the books of accounts. The A.O. has referred the matter to the Departmental Valuation cell to ascertain the market value of the immovable properties, however, the A.O. has not received the report of the Departmental valuation cell, and therefore, he has completed the assessment with a rider that assessment will be revised after report received from the departmental valuation cell. Subsequently, the Ld. Commissioner passed an order u/s 25(2) of the Wealth Tax Act, directing the assessing officer to adopt the value determined by the Departmental Valuation cell and complete the assessment. We find that the above order passed by the Ld. Commissioner is not correct and not justified. It needs modification. In view of the above, we direct the A.O. to issue one copy of the report of the Departmental Valuation Cell to the assessee and if any objections raised by the assessee, the same may be considered and complete the assessment in accordance with law - Decided in favour of assessee for statistical purposes.

Summary

Issues:
Wealth tax appeals against the order of the Principal Commissioner of Income Tax for assessment years 2007-08 to 2011-12.

Analysis:
The appellant, an individual and proprietor of a business involved in government contract works, had a search operation conducted under the Income Tax Act. The assessments revealed movable and immovable assets subject to Wealth Tax Act. The appellant failed to file a wealth tax return for 2007-08, leading to a notice from the assessing officer. The appellant later filed the return admitting net wealth. However, the values of immovable properties were not based on market values as required for wealth tax purposes. The valuation was referred to the Departmental Valuation Cell, but delays led to the completion of assessment without the valuation report. The Commissioner later directed the assessing officer to adopt the values determined by the Departmental Valuation Cell, leading to an appeal by the assessee.

The Tribunal noted the search operation revealing immovable properties subject to wealth tax. The assessing officer had not received the valuation report from the Departmental Valuation Cell but completed the assessment with a provision for revision post-receipt of the report. The Commissioner's order directing adoption of values determined by the Cell was deemed incorrect and unjustified by the Tribunal. Consequently, the Tribunal directed the assessing officer to provide a copy of the valuation report to the assessee, consider any objections raised, and complete the assessment in accordance with the law. All appeals by the assessee were allowed for statistical purposes.

In conclusion, the Tribunal's decision focused on ensuring procedural fairness by allowing the assessee to review the valuation report and raise objections before the assessment is finalized. The judgment emphasized adherence to legal requirements and proper consideration of the assessee's rights in the assessment process.