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TMI Blog1991 (5) TMI 128X X X X Extracts X X X X X X X X Extracts X X X X ..... a firm, of which he was a partner, was one of the assets disclosed in the said return. The said firm had on 9-7-1979 purchased a property situate at No. 13, Whannels Road, Madras. In the course of the assessment proceedings the Assessing Officer referred the valuation of the said property to the Valuation Officer by a reference dated 13-7-1987. However, the report of the Valuation Officer was not forthcoming and hence, the Assessing Officer completed the assessment accepting, inter alia, the value of the said property in question. This was on 1-3-1988. 3. To complete the picture, it may be mentioned that the report of the Valuation Officer was received by the Assessing Officer on 17-2-1989. In the said report, the Valuation Officer had va ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... " to substitute the valuation as reported by the Valuation Officer in the place of that adopted in the original assessment and enhance the assessment accordingly." 7. It is in these circumstances that the assessee is now before us. 8. Shri R.V. Easwar, the learned counsel for the assessee strongly urged that the Commissioner had not validly taken recourse to section 25(2) of the Act. He drew our particular attention to the fact that section 16A(6) makes it clear that the Assessing Officer was obligated to adopt the report of the Valuation Officer only when the report is present before the Assessing Officer. This will be evident from the words " on receipt of the order under sub-section (3) or sub-section (5) from the Valuation Officer " ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ue of the assets for purposes of the Wealth-tax Act. 14. We then have sub-section (2) of section 7, which provides that in the case of a business, for which accounts are maintained by the assessee regularly, the Assessing Officer may, instead of determining separately the value of each asset held by the assessee in such business, determine the net value of the business as a whole having regard to the balance-sheet of such business as on the valuation date and after making such adjustments therein as may be prescribed. As has been pointed out by the Supreme Court in the aforesaid case of Juggilal Kamlapat Bankers, even in cases covered by sub-section (2) of section 7 the WTO is free to choose either the primary method of valuation indicate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Amendment Act of 1972 with effect from 1st January, 1973." 17. We may now notice more closely the scheme of section 16A of the Act. The salient features of the section are : (i) A reference to the Valuation Officer is made for the purposes of making an assessment. This necessarily entails that assessment proceedings relating to one or more assessment years are open before the Assessing Officer. (ii) The section authorises the WTO to make a reference to the Valuation Officer under three circumstances : (a) Where the value of the asset as returned by the assessee is in accordance with the estimate made by a registered valuer but the Assessing Officer is of the opinion that the value so returned is less than its fair market value. ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... analysis :--- (a) A reference to the Valuation Officer under section 16A is not automatic in the sense that the Assessing Officer is obligated to make a reference in each and every case. Section 16A contemplates selective reference in the sense that a reference is to be made to the Valuation Officer only in cases where the Assessing Officer is of the opinion that it is necessary to make such a reference. (b) The opinion itself may be formed either on quantitative considerations [section 16A(1)(a) and section 16A(1)(b)(i), or on qualitative considerations section 16A(1)(b)(ii)]. (c) Once he makes a reference to the Valuation Officer, the Assessing Officer is bound by the order of the Valuation Officer. (d) Neither section 16A, nor f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ubt, when on 1-3-1988 the Assessing Officer passed the impugned assessment order, the order of the Valuation Officer was not available before him. On that date, however, the assessment was not getting barred by limitation. Under section 17A of the Act the assessee would have got barred by limitation only on 1-4-1988. Therefore, the Assessing Officer was not justified in completing the assessment on 1-3-1988 without awaiting the order of the Valuation Officer, especially when he had himself made a reference under section 16A to the Valuation Officer. A similar situation arose in the case of P. K. Bajpaie (HUF) v. WTO [1984] 7 ITD 913 and the ITAT, Calcutta Bench-B upheld the order in revision passed by the Commissioner. 22. We may now exam ..... X X X X Extracts X X X X X X X X Extracts X X X X
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