1990 (3) TMI 97 - AT - Wealth-tax

Summary

Issues Involved:
1. Valuation Method of "Laxmi Vijay Property"
2. Applicability of Rent Capitalisation Method
3. Adoption of Valuation as per Tribunal's Previous Orders
4. Application of Schedule III of the Wealth Tax Act
5. Retrospective Application of Valuation Rules

Issue-wise Detailed Analysis:

1. Valuation Method of "Laxmi Vijay Property":
The core dispute in the appeals revolves around the appropriate method for valuing the "Laxmi Vijay Property." The assessee argues for the rent capitalisation method, while the authorities have used different valuation methods in previous assessments. The Tribunal's previous orders have not conclusively determined the proper method for valuation, instead opting for an estimate based on the totality of facts and circumstances.

2. Applicability of Rent Capitalisation Method:
The assessee contends that the valuation should be based on the rent capitalisation method, as adopted by the registered valuer, due to the property's partial occupation by tenants and the owner's small-scale factory. The assessee supports this method by citing the approved valuer's report and the Tribunal's decision in a similar case (WTO vs. Smt. Lataben U. Sheth), where the rent capitalisation method was deemed appropriate for properties let out to old tenants.

3. Adoption of Valuation as per Tribunal's Previous Orders:
The Tribunal's earlier decision (order dated 14th Oct., 1987) estimated the property's value without specifying a valuation method, considering it a question of estimate. The learned Departmental Representative argues that the property remains unchanged, and thus, the valuation should follow the Tribunal's previous order. However, the assessee asserts that the new rules in Schedule III should be applied to all pending proceedings, as they provide a more accurate and uniform valuation method.

4. Application of Schedule III of the Wealth Tax Act:
The assessee argues that Schedule III, containing rules for determining the value of assets, should be applied retrospectively to all pending proceedings. The Schedule, introduced by the Direct Tax Laws (Amendment) Act, 1989, provides a specific formula for valuing immovable properties based on net maintainable rent multiplied by 12.5. The assessee cites several judgments supporting the retrospective application of procedural and machinery provisions, including Standard Mills Co. Ltd. vs. CWT and CWT vs. Maharaja Kumar Kamal Singh.

5. Retrospective Application of Valuation Rules:
The Tribunal acknowledges that Schedule III was not in existence during the previous order but recognizes its introduction to reduce litigation and provide certainty in valuation. The Tribunal refers to the Gujarat High Court's judgments in CWT vs. Kasturbhai Mayabhai and CWT vs. Niranjan Narottam, which held that procedural provisions should apply retrospectively to all pending proceedings. The Tribunal concludes that the rules in Schedule III are procedural and beneficial, thus applicable to the years under consideration.

Conclusion:
The Tribunal sets aside the orders passed by the Commissioner of Wealth Tax (Appeals) and remands the matter back to the Wealth Tax Officer for determining the value of the "Laxmi Vijay Property" in accordance with the new rules in Schedule III of the Wealth Tax Act, 1957. The appeals are treated as allowed for statistical purposes.