1984 (6) TMI 101 - AT - Income Tax

Summary

Issues: Valuation of shares for Estate Duty assessment, legality of rectification proceedings under sections 59 and 61 of the Act, change of opinion by revenue authorities.

Analysis:

The case involved an appeal by the Accountable Person under the ED Act, 1953, regarding the valuation of equity shares after the death of Dr. M.C. Sethi. Initially valued at Rs. 6,86,400, the Asstt. CED valued them at Rs. 7,45,800. Subsequently, after reassessment under section 59 of the Act, the value was increased to Rs. 8,38,200 based on a certificate from the Economic Times. The Tribunal annulled this reassessment, stating it was a change of opinion. The Asstt. CED then repeated the same value in rectification proceedings under section 61, leading to a dispute before the Appellate Controller.

The Appellate Controller reduced the value to the one offered by the accountable person initially, which was not accepted by the Asstt. CED. The accountable person's counsel argued that the rectification was an attempt to repeat the previous assessment, citing legal precedent to support the claim that rectification cannot undo findings of superior courts. The departmental representative, however, relied on the Appellate Controller's order and legal cases to justify the sustained addition.

Upon considering the arguments, the Tribunal found that the rectification proceedings amounted to a change of opinion by the revenue authorities. Citing a Supreme Court case, the Tribunal held that rectification under section 61 was not appropriate in this scenario and could lead to prolonged litigation. Consequently, the rectification orders by the lower authorities were annulled, and the appeal was allowed.

In summary, the judgment addressed the valuation of shares for Estate Duty assessment, the legality of rectification proceedings under sections 59 and 61 of the Act, and the concept of change of opinion by revenue authorities. The Tribunal emphasized the need to avoid repetitive assessments based on changing opinions and highlighted the importance of upholding decisions made by higher courts to prevent prolonged litigation.