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TMI Blog1994 (5) TMI 264X X X X Extracts X X X X X X X X Extracts X X X X ..... of assessment under the Act on 21st March, 1988. Against column 7 of the return, "Capital value of the building", the petitioner mentioned "Rs. 2,08,10,330". The petitioner also mentioned in column 13 the amount of ₹ 10,75,632 as the annual value of the building fixed by the local authority. Pursuant to a query made by the assessing authority, namely, the Tahsildar, the petitioner informed him by letter dt. 31st May, 1983 (Ext. P5) that the total amount expended by it on the building was ₹ 248 lakhs, made up of ₹ 208 lakhs cost of civil works including water supply and sanitation, ₹ 11.60 lakhs cost of electrical installation works and ₹ 28.40 lakhs cost of electrical fittings including A.C., transformer, O.C.B, generator and lifts. The assessing authority obtained report dt. 14th June, 1988, from the Revenue Inspector about the capital value of the building at the P.W.D. rates of cost of construction, the value reported being ₹ 92,85,461. The Revenue Inspector made a further report based on the petitioner's letter dt. 31st May, 1988, that the cost of construction of ₹ 248 lakhs and the land value aggregated ₹ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the basis that the capital value disclosed by the petitioner could not be the cost of construction as contended by it, inasmuch as, the petitioner had expended a sum of ₹ 248 lakhs in the construction to which it had to be added the land value taking the total cost of construction to ₹ 272.6 lakhs. But I may straightaway dispel this line of reasoning which proceeds on a misconception. A bare perusal of Ext.P5, the letter of 31st May, 1988, will show that the petitioner had claimed ₹ 208 lakhs as the cost of the civil construction, the rest of the amounts spent being on fittings. There was therefore nothing wrong in the petitioner's claim that the amount mentioned as capital value in the return was in fact the cost of (civil) construction and not the capital value. The order Ext.P6 is not, therefore, valid for the reason stated therein to sustain the assessment. 8. But the fundamental question remains whether the petitioner could resile from what it stated in the return and contend that the capital value of the building is not what is stated therein, but something else. This is the point that arises for consideration in the case and counsel for the petitio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion to deviate from the annual value fixed by the local authority and fix the annual value differently, if he is of opinion that the annual value fixed by the local authority is too low. The assessing authority may, in such cases, fix the annual value himself, having regard to the factors enumerated in sub-s. (4) and after giving the person affected an opportunity of being heard, the factors mentioned being (a) the location of the building, (b) the nature and quality of the structure of the building, (c) the capability of the building for profitable use, (d) amenities provided in the building, (e) access to the building from public roads or waterways, (f) the value of the land on which the building is constructed, (g) the estimated cost of construction of the building and (h) such other matters as may be prescribed. I may also refer to s. 9 which prescribed the machinery for making the assessment. If the assessing authority is satisfied that the return made by the owner of the building is correct and complete, he may, under sub-s. (1) assess the amount payable as building tax on the basis of the return. If, however, he is not so satisfied, he has to follow the procedure laid down ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s incorrect. If he puts forward such a plea, he should be given a proper opportunity to show that it is so [Pullangode Rubber Produce Co. Ltd. vs. State of Kerala 1972 CTR (SC) 253: (1973) 91 ITR 18(SC)]. When the assessee contends that he has committed a mistake in making the admission, it cannot be relied on without first considering the said contention [Satinder Kumar vs. CIT 1976 CTR (HP) 335: (1977) 106 ITR 64(HP)] at page 72. Thus while an admission made by an assessee is relevant, it is not conclusive. It is open to the assessee to explain or clarify under what circumstances it was made, or to prove that what was stated did not reflect the true state of affairs. But in the absence of any demur or explanation therefor, an admission is almost conclusive regarding the facts contained therein [Dy. Commr. of ST vs. Imperial Trading Co. (1990) 76 STC 183(Ker)]. Having regard to this state of the law, it was open to the petitioner to plead that the admission contained in its return was made under a mistake and to have the capital value fixed in accordance with law. 15. I must also note here that before a departure is made from the annual value of the building fixed by the local au ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ount did not really reflect the cost of construction, though correct to a limited extent, is not sufficient to overrule the plea of mistake made by the petitioner.
18. If the return was mistaken and I have mentioned that even otherwise the assessment has to follow the pattern prescribed by s. 6(2) it was incumbent on the authorities to determine the capital value of the building in accordance with the provisions of the Act and having regard to the factors mentioned in s. 6(4) if the annual value fixed by the Aluva municipality was considered too low. Neither the appellate nor revisional authorities applied their mind to this aspect. Nor the assessing authority whose order of assessment, as already mentioned, does not disclose the basis of the assessment, or comply with r. 8(3).
The orders Exts.P2, P3 and P6 have therefore to be quashed. I do so. The second respondent assessing authority is directed to make an assessment afresh in accordance with law with opportunity to the petitioner to be heard as expeditiously as possible. The amount, if any, paid by the petitioner will be retained by the second respondent to be adjusted towards the tax as assessed afresh. No costs. X X X X Extracts X X X X X X X X Extracts X X X X
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