1982 (5) TMI 63 - AT - Wealth-tax

Summary

Issues:
1. Valuation of immovable properties for assessment years 1965-66 to 1969-70.
2. Jurisdiction of the CWT to set aside assessment orders based on a subsequent valuation report.
3. Admissibility of valuation report obtained after completion of the assessment.
4. Interpretation of the Board's Circular for Instruction No. 365.
5. Legality of the Circular extending to judicial aspects of the Act.

Analysis:
1. The appeals involved assessments of an HUF's immovable properties in Bombay for the years 1965-66 to 1969-70. The initial valuation by the assessee was revised based on a valuation report by a Government Approved Valuer, which was accepted by the WTO. However, a Departmental Valuation Officer later valued the properties significantly higher, leading to a dispute over the correct valuation.

2. The CWT set aside the assessment orders based on the Departmental Valuation Officer's report, considering the valuation adopted by the WTO as low. The assessee challenged this decision, arguing that the subsequent valuation report was inadmissible and the CWT could not rely on it to declare the assessment orders erroneous. Reference was made to case law to support the contention that the CWT must independently assess the correctness of the orders.

3. The Deptl. Rep. supported the CWT's decision, citing a Delhi High Court case to argue that accepting the assessee's statement without proper inquiry can render the assessment erroneous. The Deptl. Rep. also highlighted a Board's Circular instructing the referral of property valuations exceeding Rs. 5,00,000 to a Valuation Officer, which was not followed by the WTO in this case.

4. The assessee contended that the Circular exceeded the provisions of the Act and was invalid, citing a Madras High Court decision. The Tribunal found that the Circular's direction went beyond the Act's scope and affected judicial aspects, making it non-binding on the WTO. Consequently, the CWT's reliance on the Circular to set aside the assessment orders was deemed unjustified.

5. Ultimately, the Tribunal held that the CWT's order was unsustainable and set it aside, allowing the appeals. The decision was based on the inadmissibility of the subsequent valuation report and the Circular's non-binding nature on the assessment process.