1989 (5) TMI 95 - AT - Income Tax

Summary

Issues:
- Appeal against order under s. 25(2) of the WT Act, 1957 for asst. yrs. 1981 and 1982-83.
- Valuation of properties based on gross municipal valuation.
- Application of standard rent for property valuation.
- Substitution of original cost under s. 7(4) of the WT Act.
- Invocation of provisions of s. 25(2) by the CWT.
- Valuation of unquoted shares based on different court judgments.

Analysis:

The appeals were filed against the order under s. 25(2) of the WT Act for the assessment years 1981 and 1982-83, concerning the valuation of properties owned by the assessee based on gross municipal valuation. The CWT invoked the standard rent for property valuation, citing Tribunal decisions, and calculated the value of the properties accordingly. The CWT also allowed substitution of original cost under s. 7(4) of the WT Act for the Bombay property. The total value of both properties, after exemptions, was determined by the CWT.

The authorized representative argued that the assessment made by the assessing authority was not erroneous, referencing judgments supporting valuation based on municipal valuation. He contended that the provisions of s. 25(2) were not applicable in this case. The Departmental Representative supported the CWT's decision, aligning it with Tribunal decisions.

The Tribunal analyzed the arguments and held that the valuation of properties based on gross municipal valuation, as accepted by the assessing authority, was not erroneous. The Tribunal emphasized that the scope of interference under s. 25(2) is not to set aside unfavourable orders based on mere change of opinion. Therefore, the order passed by the CWT under s. 25(2) was canceled.

Regarding the valuation of unquoted shares, the CWT estimated higher valuation based on a specific court decision. However, the authorized representative highlighted a Bombay High Court judgment supporting the original valuation by the WTO. The Tribunal agreed with the representative, stating that the CWT should have accepted the Bombay High Court judgment, and the issue should not have been referred back to the IAC. Consequently, the order under s. 25(2) by the CWT for both years was canceled, and the appeals by the assessee were allowed.