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2016 (11) TMI 708 - HC - Wealth-taxWealth tax assessment - ITAT held that certain provisions of building bye laws framed by J.D.A in Jan, 1996 were to apply retrospectively for Wealth Tax assessment on valuation date 31.3.1987 - applacability of provision of bye laws of J.D.A of Jan, 1996 - Held that - In the present case, in our view, Regulations 1996 for the purpose of assessment of valuation of disputed property are not at all applicable unless it is shown that the disputed property has been developed or constructed observing the standards and requirements of Regulations 1996 or any other Regulations under J.D.A. Act, 1982. To us it appears that JDA Regulations 1996 have not been appreciated by Tribunal in the light of the provisions of JDA Act 1982. The purpose and object of such Regulations has been misconstrued. We, therefore, have no hesitation in holding that for the purpose of valuation of property in dispute, reliance placed on Regulations 1996 was neither correct nor valid nor in accordance with law. In the present case, the said Regulations will have no application for the purpose of valuation of building in dispute and it will have to be made only in accordance with Schedule III, as it is. We therefore, answer substantial questions of law formulated above, by holding that Regulations 1996 are not retrospective but operates on and after 28.6.1996 that is the date of publication of notification in the Gazette but it would make no difference in the present case, for the reasons that these Regulations have no application to the disputed property which has to be valued as per the procedure prescribed in Schedule III of Act, 1957. All the questions are therefore, answered in favour of Revenue and against Assessee
Issues Involved:
1. Retrospective application of building bye-laws framed by Jaipur Development Authority (JDA) in January 1996 for Wealth Tax assessment on valuation date 31.3.1987. 2. Applicability of JDA bye-laws to properties with pre-existing construction according to sanctioned plans. 3. Correctness of the Income Tax Appellate Tribunal’s (ITAT) application of JDA regulations retrospectively. 4. Validity of the Assessing Officer’s (A.O.) reference to the District Valuation Officer (D.V.O.) for property valuation. Detailed Analysis: Issue 1: Retrospective Application of JDA Bye-laws The court examined whether the JDA regulations of 1996 could be applied retrospectively to the valuation date of 31.3.1987. The Tribunal had held that these regulations, being procedural, should apply retrospectively. However, the court found that the JDA regulations, which were enacted to regulate future construction, were substantive in nature and not intended to affect existing constructions. The court emphasized that these regulations were meant for coordinated planned development and not for valuation purposes. Therefore, the court concluded that the JDA regulations of 1996 could not be applied retrospectively for the valuation of the property in dispute. Issue 2: Applicability of JDA Bye-laws to Pre-existing Construction The court scrutinized whether the JDA bye-laws could apply to properties like the Assessee’s, where the construction was already completed according to a sanctioned plan before the enactment of the regulations. The court noted that the disputed property was constructed before August 1964, and there was no evidence of further development requiring compliance with the JDA regulations. The court held that the JDA regulations did not mandate any changes to existing constructions and were not intended to apply to properties already developed. Consequently, the court found that the JDA bye-laws could not apply to the Assessee’s pre-existing property. Issue 3: ITAT’s Application of JDA Regulations Retrospectively The ITAT had ruled that the JDA regulations should be considered part of Schedule III for valuation purposes and applied retrospectively. The court disagreed, stating that the regulations were substantive, not procedural, and thus could not be applied retrospectively. The court emphasized that the regulations were designed to control future construction activities and did not provide any guidelines for the valuation of existing properties. The court concluded that the ITAT erred in applying the JDA regulations retrospectively for the valuation of the disputed property. Issue 4: Validity of A.O.’s Reference to D.V.O. The court reviewed the procedure followed by the A.O. in referring the property valuation to the D.V.O. under Section 16A of the Wealth Tax Act, 1957. The court found that the A.O. had made the reference in accordance with the statutory provisions. The D.V.O. had estimated the value of the disputed property, and the A.O. had accepted this valuation. The court noted that the Assessee’s objections to the D.V.O.’s report were considered but ultimately rejected. The court upheld the validity of the A.O.’s reference to the D.V.O. and the subsequent valuation process. Conclusion: The court held that the JDA regulations of 1996 were not applicable retrospectively and could not be used for the valuation of the disputed property for the assessment years in question. The court also upheld the validity of the A.O.’s reference to the D.V.O. for property valuation. As a result, the court set aside the ITAT’s judgments and restored the decisions of the Commissioner of Wealth Tax (Appeals). The appeals were allowed in favor of the Revenue, and the substantial questions of law were answered against the Assessee.
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