9911796707
TMI Blog1984 (6) TMI 138X X X X Extracts X X X X X X X X Extracts X X X X ..... facts in this regard are briefly as follows. 2. The wealth-tax assessments for both these years were completed on 30-1-1981 computing the net wealth at Rs. 4,02,070 for 1977-78 and Rs. 4,42,996 for 1978-79. One of the assets included in the net wealth in both these years was an immovable property at No. 15, Kalasipalayam, Bangalore. The assessee had declared the value of this property at Rs. 5,16,500 and Rs. 5,05,032, respectively, for these two years on the basis of the report of a registered valuer, who had estimated its market value in December 1976 at Rs. 5,28,000 by averaging the products of the land and building and rent capitalisation methods. The WTO, while accepting the value of the super structure as declared by the assessee on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itures, etc. It was submitted that as against the actual cost as mentioned above, the registered valuer had estimated the value of the building as on 31-3-1977 at Rs. 5,25,000. A reference was also made to the value of gold per gram that prevailed on the relevant valuation dates as a guideline in this regard and it was argued that the steep rise in the value of real estate took place only during the period 1978-79. As regards the market value of Rs. 10,29,000 adopted in the wealth-tax assessment for 1979-80 on the basis of the order of the departmental Valuation Officer under section 16A(5), it was submitted that the same had subsequently been reduced by the AAC in appeal to Rs. 8,82,000. With reference to these factors and submissions, it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng to section 263 of the Income-tax Act, 1961 ('the 1961 Act') confers on the Commissioner the power of revision if he considers that an order passed by the WTO is erroneous insofar as it is prejudicial to the interests of the revenue. According to the representative, the section requires that two conditions should be satisfied in order to entitle the Commissioner to set aside an order passed by the WTO. Such conditions are : (1) that the order proposed to be revised is erroneous and (2) that such order has resulted in prejudice to the interests of the revenue. The satisfaction of these two conditions is essential for setting aside the order proposed to be revised. With reference to the above requirements of the section, the learned represe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d an error in doing so, particularly when such a method of valuation had also the approval of the Karnataka High Court in the above-mentioned decision. He, therefore, submitted that there was no error apparent in the action of the WTO in this behalf so as to entitle the Commissioner to assume jurisdiction under section 25(2). He also submitted that the facts that the very same property was sold in October 1979 for Rs. 9 lakhs and the departmental valuer had valued the property as at 31-3-1979 at Rs. 10,29,000 on the basis of a reference made to him under section 16A(5) are totally extraneous to the issue, inasmuch as these events took place subsequent to the valuation date and, therefore, they cannot form part of the record of the proceedin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 25. 8. In reply, the representative of the assessee submitted that the sale of the property in October 1979 did not form part of the record of proceedings, and in any event, there was a difference of one and a half years between this date and the last of the valuation dates. He also brought to our notice that as regards the valuation adopted for the assessment year 1979-80 on the basis of the departmental valuer's report, the same had been reduced on appeal to Rs. 8,82,000. In any case, he submitted that there was a spurt in the value of properties after 31-3-1978 and, therefore, the same cannot be adopted as a measure for determining the value of the property as on the respective valuation dates under consideration. 9. We have c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... estimate by an expert on the basis of value of the land and building. It is usual to value the properties by more than one method so as to crosscheck and adopt an average. This is resorted to when there is great disparity between the valuation arrived at by different methods. " The value ascertained by averaging the products of these methods has in turn been accepted by the WTO while completing the assessments. It cannot, therefore, be said that the WTO committed an error in accepting the value returned by the assessee in this behalf. Events which have happened subsequently cannot also render the assessments made as erroneous, inasmuch as the WTO could not have anticipated the sale of the property, or for that matter the valuation placed ..... X X X X Extracts X X X X X X X X Extracts X X X X
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