1985 (4) TMI 112 - AT - Wealth-tax

Summary

Issues: Jurisdiction of CWT to revise assessment order based on merger with appellate order, Correctness of property valuation by CWT.

Jurisdiction Issue:
The case involves an appeal by the assessee regarding the valuation of a property for the assessment year 1975-76. The CWT revised the assessment order, increasing the property value to Rs. 1.75 lakhs, based on a subsequent sale agreement for the property at a higher price. The assessee contended that the CWT had no jurisdiction to revise the assessment order as it had merged with the appellate order. The CWT rejected this argument, leading to the present appeal. The assessee relied on the decision of the Kerala High Court in Methar & Co. (P) Ltd. vs. ITO (1969) 71 ITR 247 (Ker), which held that once an assessment order merges with an appellate order, it cannot be rectified. The Department argued that rectification could be done on matters not subject to appeal. The Tribunal, following the decision in Dwarkadas & Co. (P) Ltd. ITO (1982) 13 TTJ 107 (Bom) (SB), held that a revision in this case was incompetent, as the assessment order had merged with the appellate order. Despite conflicting decisions from other High Courts, the Tribunal upheld the merger principle and found the revision by the CWT to be invalid.

Property Valuation Issue:
The CWT fixed the property value at Rs. 1.75 lakhs, which was contested by the assessee in the appeal. However, due to the finding on the jurisdiction issue, the Tribunal did not delve into the correctness of the property valuation. As a result, the appeal was allowed, and the CWT's order was set aside.

This judgment primarily addresses the jurisdiction of the CWT to revise an assessment order based on the merger with an appellate order and the correctness of the property valuation. The Tribunal's decision was based on the principle of merger between assessment and appellate orders, following the precedent set by the Kerala High Court and the Special Bench of the Tribunal. The appeal was allowed, setting aside the CWT's order without delving into the valuation issue due to the jurisdictional finding.