9911796707
TMI Blog1989 (11) TMI 93X X X X Extracts X X X X X X X X Extracts X X X X ..... nd they had 1/5th share therein. In the course of the assessment proceedings, the assessee's claim that the property should be valued according to the provisions of Rule 1BB of the Wealth-tax Rules. The WTO did not accept the assessee's claim since the assessment year involved was 1977-78 and the Rule in question came into force only in 1979. Further he referred the question of valuation of this property to the Valuation Officer. He finalised the assessments taking 1/5th share at Rs. 2,74,700 as per the Valuation Officer's report. 3. The assessees appealed. The question involved before the AAC was, whether the provisions of Rule 1BB would be applicable to this assessment year 1977-78. She held that the assessee should succeed in view of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er, it is binding on the WTO when he proceeds to value a property under section 7(1). He then pointed out that, when a matter is referred to a Valuation Officer, the Valuation Officer steps into the shoes of the WTO. That means that, whatever provisions of law would govern the exercise of the authority of the WTO, will govern the Valuation Officer also. He, therefore, has to take into account the provisions of Rule 1BB. In the alternative, he submitted that it was the duty of the WTO first to find out, whether the valuation was acceptable or if it was not acceptable, then he has to find out whether the difference is such that a reference to the Valuation Officer is required. He submitted that it is not in each and every case, where the WTO ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e which in the opinion of the WTO, it would fetch, if sold in the open market. This valuation, section 7(1) is subject to the rules made in this behalf. In other words, if there are rules providing for a method of valuation, the WTO must apply these rules. It is not in dispute that if the WTO were to proceed to evaluate the property under section 7(1), Rule 1BB would be applicable. 8. However, section 7(3) states as follows :-- " (3) Notwithstanding anything contained in sub-section (1), where the valuation of any asset is referred by the WTO to the Valuation Officer under section 16A, the value of such asset shall be estimated to be the price which, in the opinion of the Valuation Officer, it would fetch if sold in the open market on t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rvation was made in the context of the arguments before the court that a reference cannot be made under section 16A without first ascertaining from the assessee the evidence and the valuation he has to support the return under section 16(2). Later, at page 194, the High Court has observed. " It is, therefore clear that though the Valuation Officer may step into the shoes of the WTO for a limited purpose, the basic position i.e. WTO who is the assessing officer, remain unaltered ". This point is made further clear by the Delhi High court in the case of Sharbati Devi Jhalani at page 561. The passage is extracted below :- " Once such a reference has been made, the valuation has then to be determined by the Valuation Officer. The value of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the market value of the property was more than the returned value by 33 1/3% or Rs. 50,000. This is to be considered only under section 7(1). It will not be considered under section 7(3) because 7(3) is partly procedural and deals with the jurisdiction of the Valuation Officer in cases referred to him under section 16A. As far as the initial stage of deciding whether the valuation has to be referred under section 16A is concerned, the WTO has to proceed under section 7(1). When he does so, he would be subject to the rules because section itself says so. If the value given by the assessee itself is worked out subject to the rules, it will be very difficult for a WTO to say that the case nevertheless requires reference under section 16A. In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... may' in section 16A(1) has to be read not only with section 16A(1)(a) but also with section 16A(1)(b)(i) and (ii). The present case falls under section 16A(1)(b)(i). If the value as computed according to rule 1D is in excess of what is returned by the assessee, then, at the instance of the assessee, a reference has to be made to the Valuation Officer. It is only in cases under section 16A(1)(b)(ii) that the WTO has the discretion to refer or not to refer the question of value of an asset to the Valuation Officer. " 13. It will be seen from the above that a reference to the Valuation Officer should come only at a stage after the scrutiny of the return and the valuation of the assets under section 7(1). Where, under section 7(1), the WTO hi ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
