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TMI Blog1982 (6) TMI 130X X X X Extracts X X X X X X X X Extracts X X X X ..... t balances appearing in capital account in the books of the firm. The partners showed various amounts in their capital on the basis of Valuation of Gopal Talkies, taken at Rs. 7,25,000 inclusive of the cost the building. According to the WTO the valuation of Gopal Talkies, taken at Rs. 7,25,000 reflected undervaluation. He therefore, caused a reference to be made to the Valuation Officer by a letter dated 6th January, 1978. The Valuation Officer issued notice to Gopal Talkies as required under section 16A(1) and finally made a report containing the valuation dated 28th January, 1979. According to the Valuation Officer, the valuation was placed at Rs. 14,73,000 on this basis, pro rata addition was made to the interest of the assessee in Gopa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h-taxAct was not correct in law and was, therefore, non est and, accordingly, should not have been taken note of in the present assessment. It is against this finding that the Revenue is in appeal before us and has pointed out that the AAC misled himself in holding that the reference made by the WTO to the Valuation Officer was bad in law and, for that reason, the valuation report was not non est. It was pointed out by the Depatmental representative that the WTO was possessed of jurisdiction which enabled him to make the reference to Valuation Officer. Other requirements of law, as prescribed in the provision contained in section 16A were fully met with. Mere error, if there was any, could not make the reference to the Valuation Officer voi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erence proceedings has to be distinguished from the valuation report, made by the Valuation Officer. We find no infirmity in the reference made by the WTO on the ground that the name of the respondent-assessees was not indicated in the letter dated 6th January 1978, we find force in the plea of Depatmental representative that there is no such requirement of law or of any rule made therein which obliges the WTO to indicate the name of the assessee. What is required is that the WTO should indicate the assets for which a valuation has to be made by the Valuation Officer. Therefore, we reject the contention of the assessee that reference, which was made by the WTO, by virtue of jurisdiction vested in him can be treated as void or invalid. At th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... termined on the basis of commercial accountancy. The finding of the AAC is contained in para 10 of his order, where he has observed that the share income of the assessee-partner in the firm has to be determined on the basis of the principles of commercial accountancy and since the WTO had not determined the interest of the assessee-partner on the basis of the commercial accountancy, the value of the assessee's interest, as determined by the WTO is not assessable in law. In this connection, counsel for the respondent-assessee has relied on the decision reported in [1980] 15 CTR (All.) 340 in the case of Seth Satish Kumar Modi v. WTO. In this connection the Depatmental representative appearing for Revenue, submitted that this is a decision, w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... We have heard both the sides and are of the view that the plea of Revenue cannot be rejected. There is force in the submission of the Depatmental representative that, on the facts and in the circumstances of the case, the rule laid down in the earlier case of J.K. Bankers was applicable to the facts of the present case. Therefore, we vacate the finding of the AAL in this matter and restore the finding of the WTO on this point. 6. Another issue, raised by the Revenue, is that the AAC was misled in finding that the assessee's interest, as determined by the WTO, was not assessable in law. In this connection, reference was made to para 4 of the AAC's order, where the AAC has enumerated several claims for deduction made by the respondent-asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has chosen to set aside the same, we have no other alternative but to send the matter back to the WTO with a direction that the WTO should re-do the same taking note of the mistakes pointed out by him. In view of this finding by us it does not call for any interference at our end. We uphold the finding of the AAC. 7. Another issue, which was pressed by the Revenue was that the AAC misdirected himself in setting aside the assessment. In fact, in this regard, while the Depatmental representative depended upon the finding of the WTO, the counsel for the respondent-assessees submitted that the assessment having been made on the basis of an invalid report, should have been made on the basis of an invalid report, should have been annulled. He ..... X X X X Extracts X X X X X X X X Extracts X X X X
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