9911796707
TMI Blog1999 (3) TMI 119X X X X Extracts X X X X X X X X Extracts X X X X ..... d property: Valuation date Asst. yr. FMV as per Departmental valuer Rs. 31-3-1988 1988-89 2,04,26,600 31-3-1989 1989-90 2,76,62,300 31-3-1990 1990-91 3,48,42,100 While these assessments were pending, the AO issued notice under s. 17 for the asst. yrs. 1988-89 and 1989-90 and in respect thereto assessee filed second return for asst. yrs. 1988-89 and 1989-90 on 1st June, 1992, showing wealth of Rs. 29,86,760 and Rs. 45,61,500 respectively. The AO completed the assessments for the asst. yrs. 1988-89, 1989-90, 1990-91 and 1991-92 on 31st March, 1994, 31st March, 1994, 26th March, 1993 and 31st March, 1994, respectively on a wealth of Rs. 72,13,900, Rs. 72,36,600, 75,68,527, and Rs. 74,93,100 respectively. The property at No. 4 Dr. Radhakrishnan Salai, was let out for 30 years to Dr. E.V. Kalyani Medical Foundation (P) Ltd. in which the assessee and her close relatives were the shareholders. The AO assessed the value of the property situated at No. 4, Radhakrishnan Salai at Rs. 63,87,325 for each of the assessment years by applying the Sch. III of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t and has not invoked r. 8 and, therefore, the order passed by the WTO was in accordance with law. Even the Valuation Officer does not have any power to reject r. 3. Rule 20 of Sch. III will be applied only in case r. 8 is applicable. None of the sub-clauses of r. 8 were applicable in the case of the assessee. The power given under r. 8(a) to the AO can be exercised only with the previous approval of the Dy. CIT. The assessee is 84 years of age and there is a nursing home running in the building. The rental income from the property has been accepted by the AO in the income-tax proceedings. The Valuation Report was available before the AO before the passing of the assessment order and the AO while framing the assessment himself found that the reference to the valuation cell was totally illegal and that r. 1BB/Sch. III of the WT Act are mandatory and binding on him. He accordingly worked out the value of the property. The CWT has exceeded his jurisdiction by setting aside the assessment while there was no error in the order passed by the WTO. The authorised representative relied on the following decisions: (1) Smt. Uma Debi Jhawar vs. WTO Ors. (1983) 32 CTR (Cal) 16 : (1982) 136 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d not taken the value of the property at No. 4 Radhakrishnan Salai as has been estimated by the Departmental valuer. 'Erroneous' means erring or wrong or full of error. The error may be of a fact or law. From paras 9, 10, 11 of the order of the CWT, it is apparently clear that according to him the AO was bound under s. 16A r/w r. 20(2) of WT Rules to complete the assessment in accordance with the value as has been estimated by the Valuation Officer. If the AO has committed an error of law, it can be said that the CWT was having the power to revise the assessment. But if there is no error in the order of the AO, we cannot say that the CWT can revise the assessment order passed by the AO. To ascertain whether the assessment has been framed by the AO in accordance with law or net we have to refer to s. 7 of the WT Act. Sec. 7(1) as amended w.e.f. 1st April, 1989, as applicable to asst. yrs. 1989-90, 1990-91 and 1991-92 lays down as under: "Subject to the provisions of sub-s. (2), the value of any asset, other than cash, for the purposes of this Act shall be its value as on the valuation date determined in the manner laid down in Sch-III." As per this section, it is apparently clea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cord. The second criteria relates where the difference between the unbuilt area and the specified area exceeds twenty per cent of the aggregate area. The third criteria relates to where the property is constructed on leasehold land and the lease is about to expire within a period not exceeding 15 years from the date of the relevant valuation date and under the terms of the lease deed, no option is given to the lessee for the renewal of the lease. The Departmental Representative could not prove that the case under consideration falls under any of the criteria laid down under r. 8 of Sch. III. Rule 8 further states that if a case falls under any of the three criterias given thereunder the value of the property shall be determined in the manner laid down in r. 20. Thus in the case of the assessee, the AO has not invoked r. 8 so that the determination of the valuation of property may come out of the purview of r. 3. 5. Rule 20 consists of three sub-rules. Sub-r. (1) relates to the determination of the value of an asset which is not covered by rr. 3 to 19. This is not so in the instant case. Sub-r. (2) relates to a case where the valuation of any asset has been referred to the Valuati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be specified in the notice, his objections either in person or in writing before the Valuation Officer and to produce or cause to be produced on that date such evidence as the assessee may rely in support of his objections. (5) On the date specified in the notice under sub-s. (4) or as soon thereafter as may be, after hearing such evidence as the assessee may produce and after considering such evidence as the Valuation Officer may require on any specified points and after taking into account all relevant materials which he has gathered, the Valuation Officer shall, by order in writing, estimate the value of the asset and send a copy of his order to the AO and to the assessee. (6) On receipt of the order under sub-s. (3) or sub-s. (5) from the Valuation Officer, the AO shall so far as the valuation of the asset in question is concerned, proceed to complete the assessment in conformity with the estimate of the Valuation Officer." 6. Sub-s. (1) of s. 16A empowers the AO to refer the valuation of any asset to a Valuation Officer only in cases where under provisions of s. 7 read with the rules made under this Act or under the rules as stipulated in Sch. III, the market value of a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sentative of the assessee. But we find that these cases are not applicable to the facts of the assessee. The three cases relied on by the authorised representative: (i) Onkarji Kasturchand (HUF) vs. WTO; (ii) Satyendra Chunder Ghose vs. WTO Ors., and (iii) Smt. Uma Debi Jhawar vs. WTO Ors. holds only that reference to the Valuation Officer can be made when the proceedings before the AO are pending. In the case of the assessee the proceedings were very much pending before the AO when the reference was made to the Valuation Officer. The tenancy of the building had not been rejected by the AO while framing the assessment. The Hon'ble Supreme Court in the case of CWT vs. Sharvan Kumar Swamp Sons (1994) 210 ITR (St) 13 dealt with the question as to whether r. 1BB is procedural or not and has laid down as under therein: "Rule 1BB thus partakes of the character of rule of evidence. It deems the market value to be the one arrived at on the application of a particular method of valuation which is also one of the recognised and accepted methods. Even if a law raises a presumption and renders the presumption irrebuttable it is yet in the domain of the law of evidence........ O ..... X X X X Extracts X X X X X X X X Extracts X X X X
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