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TMI Blog1995 (5) TMI 75X X X X Extracts X X X X X X X X Extracts X X X X ..... ad made addition on account of the difference between the fair market value and the book value of the plant and machinery owned by the firm. The addition was based on the report of the DVO. 3. The addition was challenged in appeals by all the assessees. In the appeals filed by Shri Mahendra Kumar Sethia and Shri Prem Kumar Sethia the Dy. CWT(A) noted that similar point had come up for consideration before the CWT(A) in the case of Shri Vinaychand Chhajlani pertaining to the asst. yr. 1986-87 and vide order dt. 9th Aug., 1991, the CWT(A) has set aside the matter to the Assessing Officer for a fresh decision. Following that order the Dy. CWT(A) set aside the matter to the Assessing Officer for a fresh decision. The order passed in the case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion, the plant and machinery also suffer depreciation and the same has also to be taken into account. Since the addition worked out by the Assessing Officer was not in accordance with the rules, the assessment on the point was set aside to be framed afresh and determining the proper fair market value on proper basis. 5. The learned counsel for the assessee has argued that in the instant cases the Dy. CWT(A) has committed an error in setting aside the matter to the Assessing Officer following the order of the CWT(A) ordered in the case of Shri Vinaychand Chhajlani. It has been pointed out that in the case of Shri Vinaychand Chhajlani the valuation report of the relevant assessment year was not there in the assessment proceedings. It has b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ding to the assessee, the increase on the basis of the price index cannot be applied to the case of plant and machinery. It was argued that there is vast improvement in the technology and models of machines. Therefore, the value of the old and outdated models, the production of which has been stopped by the manufacturers, which are slow in speed and costlier to operate and for which it is difficult to get spare parts for repairs, should not be valued on the basis of increase in the price index. In the case of machinery, the market value of the same model of the same manufacturer should be taken into account on the date of valuation, the change in the technology and the model should also be taken into account. It has been pointed out that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cturer, original price, price to the owner, if he is not the first owner, year of manufacture, present market price of similar new machinery/plant and other relevant factors. It was submitted that these particulars are lacking in the report submitted by the DVO and for this reason also the value determined by him is not acceptable. 11. It was also submitted that in determining the valuation the DVO has taken the expected life of a machine as 20 years. According to him, the usual life of plant is about ten years. Our attention was also invited to rr. 2, 2A and 2B of the WT Rules which have been omitted w.e.f. 1st April, 1989 but were on the statute book at the relevant time. It was submitted that these rules provide that where the market v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e secretary of the firm filed general objections on 7th Jan., 1987 and even these objections have not been considered by the Valuation Officer and the report dt. 8th Jan., 1987 was submitted. 13. Opposing the submissions of the assessee the learned Departmental Representative has supported the order of the Dy. CWT(A). He has also argued that the Form 07 is meant for the report to be given by a registered valuer. It is not meant to be used by the DVO. He has also submitted that keeping in view the rising price, the DVO was justified in working out the fair market value on the basis of the price index. 14. We have considered the rival submissions. We find considerable force in the contention of the assessee that due to advancement in tech ..... X X X X Extracts X X X X X X X X Extracts X X X X
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