1989 (1) TMI 144 - AT - Wealth-tax

Issues Involved:
1. Justification of the assessee's claim for the benefit of section 7(4) of the Wealth-tax Act, 1957.
2. Valuation of the property "Dhairya Prasad" for the assessment years 1979-80, 1980-81, and 1981-82.
3. Applicability of the doctrine of estoppel in taxation matters.
4. Eligibility of a Hindu Undivided Family (HUF) for the benefit under section 7(4) of the Wealth-tax Act.

Issue-wise Detailed Analysis:

1. Justification of the assessee's claim for the benefit of section 7(4) of the Wealth-tax Act, 1957:
The primary dispute revolves around whether the assessee, a HUF, is entitled to the benefit of section 7(4) of the Wealth-tax Act, 1957, for the property "Dhairya Prasad." The Wealth-tax Officer (WTO) initially rejected the claim, arguing that the property was previously declared as a farm house and not as a self-occupied property. However, the Commissioner of Wealth-tax (Appeals) [CWT(A)] found the assessee entitled to the benefit of section 7(4) and directed the WTO to adopt the market value of the property as on 1-4-1971. The Tribunal upheld this decision, stating that the doctrine of estoppel does not apply to taxation matters, and the assessee cannot be barred from claiming a legitimate benefit under section 7(4).

2. Valuation of the property "Dhairya Prasad" for the assessment years 1979-80, 1980-81, and 1981-82:
For the assessment year 1979-80, the assessee initially valued the property at Rs. 5,67,675 and claimed exemption under section 5(1)(iv) of the Act. The WTO valued the property at Rs. 10,90,403, but the CWT(A) directed the WTO to refer the valuation to the Departmental Valuation Officer (DVO). For the assessment years 1980-81 and 1981-82, the assessee filed revised returns, claiming the benefit of section 7(4) and valuing the property at Rs. 2,70,000 as per the valuer's report. The DVO valued the property at Rs. 13,52,600, Rs. 15,09,400, and Rs. 19,28,300 for the respective years, using the land and building method. The Tribunal upheld the CWT(A)'s direction to adopt the market value as on 1-4-1971 for the property.

3. Applicability of the doctrine of estoppel in taxation matters:
The WTO argued that the assessee was estopped from claiming the benefit under section 7(4) because the property was previously declared as a farm house. The CWT(A) and the Tribunal rejected this argument, stating that the principle of estoppel does not apply to taxation matters. Each assessment is independent, and an assessee cannot be barred from advancing a legitimate claim in subsequent assessments. The Tribunal emphasized that the benefit conferred by section 7(4) cannot be taken away solely because it was not claimed earlier.

4. Eligibility of a Hindu Undivided Family (HUF) for the benefit under section 7(4) of the Wealth-tax Act:
The WTO contended that the benefit under section 7(4) was available only to individuals and not to HUFs. However, the CWT(A) and the Tribunal disagreed, citing the Ahmedabad Bench 'A' decision in the case of WTO v. Shrenik Kasturbhai, which held that the benefit of section 7(4) is also available to HUFs, provided the other requirements of section 7(4) are fulfilled. The Tribunal confirmed that the property in question was wholly used for residential purposes and met the criteria for the benefit under section 7(4).

Conclusion:
The Tribunal upheld the CWT(A)'s decision, granting the benefit of section 7(4) to the assessee-HUF for the property "Dhairya Prasad" and directed the WTO to adopt the market value as on 1-4-1971 for the assessment years 1979-80, 1980-81, and 1981-82. The appeals by the revenue were dismissed.

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