1971 (4) TMI 28 - HC - Wealth-tax

Reference To High court contention that valuers report (which were relied upon by tribunal during dispute of valuation) did not disclose reasons for its decision was not raised before the Tribunal reference cannot be made to HC

Summary

Issues:
1. Valuation of goodwill under the Wealth-tax Act, 1957.
2. Justification of the decision based on valuers' report.
3. Tribunal's authority to dispose of appeal based on valuers' decision.

Analysis:
The case involved a reference under section 27(3) of the Wealth-tax Act, 1957, regarding the valuation of goodwill for the assessment year 1958-59. The Wealth-tax Officer included the goodwill value of Rs. 10 lakhs in the respondent's net assets, which was contested before the Appellate Assistant Commissioner. The Commissioner argued that the valuation lacked reasoning, leading to the referral of the matter to two valuers as per section 24(6) of the Act. The valuers unanimously reported the goodwill value as "nil" on 31st December 1957, based on which the Tribunal directed the goodwill value to be considered as "nil" for assessment purposes.

The main contention before the High Court was the absence of reasons in the valuers' report justifying the goodwill valuation as "nil." However, the Court's jurisdiction was limited to questions of law arising from the Tribunal's order. As per precedent, if a legal question was not raised or considered by the Tribunal, it cannot be entertained on appeal. In this case, it was found that the specific point regarding the lack of reasoning in the valuers' report was not raised before the Tribunal, and hence, could not be considered by the Court.

Regarding the Tribunal's authority to base its decision on the valuers' report, the Court upheld the Tribunal's action as per the provisions of section 24(6) of the Act. Since the valuers unanimously determined the goodwill value as "nil," the Tribunal was bound to make an order in conformity with the valuers' decision. Consequently, the Court declined to entertain questions 1 and 2 related to the valuation methodology but answered question 3 in the affirmative, in favor of the respondent. Each party was directed to bear its own costs, and both judges concurred with the decision.

In conclusion, the High Court upheld the Tribunal's decision based on the valuers' report, emphasizing the limited scope of judicial review in matters where legal issues were not raised before the lower authorities. The judgment reaffirmed the statutory provisions governing valuation disputes under the Wealth-tax Act, 1957, and the binding nature of valuers' decisions as per the relevant sections of the Act.