1982 (5) TMI 59 - AT - Wealth-tax

Summary

Issues:
Assessment of HUF for the years 1965-66 to 1969-70 based on immovable property valuation discrepancies.

Analysis:

The case involved appeals by a Hindu Undivided Family (HUF) concerning assessments for the years 1965-66 to 1969-70, focusing on the valuation of immovable properties owned by the HUF in Bombay. Initially, the properties were valued at Rs. 3,50,000 for the first three assessment years and at Rs. 8,03,000 for the subsequent two years based on a valuation report by a government-approved valuer. The Wealth Tax Officer (WTO) accepted these values in the original returns. However, a departmental valuer later assessed the properties at significantly higher values for each year, leading the Commissioner to believe that the WTO's valuation was low, prompting a reassessment. The Commissioner set aside the original assessments, directing the WTO to determine the correct market value of the properties for each year.

The primary issue raised in the appeal was the validity of relying on the departmental valuation report obtained post the completion of the assessments. The appellant contended that this report was inadmissible as evidence and that the Commissioner erred in using it to declare the original assessments as prejudicial to revenue interests. The appellant cited legal precedents to support the argument that the WTO lacked jurisdiction to request the valuation report and that the Commissioner's decision was based solely on this report without independent assessment.

In response, the departmental representative supported the Commissioner's decision, referencing legal cases and a Board's instruction to argue that the WTO's failure to follow the directive warranted reassessment. The appellant countered by asserting that the Board's circular exceeded statutory provisions and could not influence judicial aspects of the Act's administration. After careful consideration, the Tribunal held that the departmental valuation report obtained post-assessment was unwarranted under the Act and could not be used by the Commissioner to reassess. Additionally, the Tribunal found the Board's circular directive as exceeding statutory limits and not binding on the WTO for assessment purposes. Consequently, the Tribunal set aside the Commissioner's order, allowing the appeals in favor of the appellant HUF.