9911796707
TMI Blog2000 (8) TMI 56X X X X Extracts X X X X X X X X Extracts X X X X ..... opinion : "Whether, on the facts and in the circumstances of the case, the Tribunal was correct in law in coming to the conclusion that the orders of the Wealth-tax Officer were not erroneous and prejudicial to the interests of the Revenue in the cases of the three assessees?" The facts giving rise to these reference applications are as under : Smt. Shakuntla Mehra (mother), Shri Moti Lal Mehra (son) and Shri Prince Mehra (son) (hereinafter referred to as "the assessee" by respective names) had a 1/6th share each in the properties bearing Nos. (1) E. 40313, Greater Kailash-1, (2) E-337, Greater Kailash-1 and (3) H. S.-35, Kailash Colony, and five plots of land in Greater Kailash-II bearing Nos. E-22, E303, E-324, E-355 and E-576. For th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessment in each case was erroneous and prejudicial to the interests of the Revenue. The assessee in each case submitted a show cause reply. It was submitted that the assessment in respect of each of the properties had been done by a valuer and merely because a different method could be adopted for fixing the valuation, that did not make the Wealth-tax Officer's order erroneous. In the notice issued to the assessees, it was indicated by the Commissioner that the valuation should have been done only on the rental income basis and not on the basis of the average of the two, i.e., cost of construction and rent capitalisation method. After considering the assessees' replies, the Commissioner exercised power under section 25(2) of the Act a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 25(2) of the Act. It was submitted that the Tribunal proceeded on an erroneous presumption that the Commissioner had not objected to the land and construction method and the only objection related to the multiple to be adopted for rental method. There is no appearance of behalf of the assessees in spite of service of notice, when the matter was called. What constitutes an erroneous order which is prejudicial to the interests of the Revenue has been dealt with by various courts including the apex court. In Malabar Industrial Co. Ltd. v. CIT [2000] 243 ITR 83, the matter was again examined by the apex court and it was observed as follows : "The phrase 'prejudicial to the interests of the Revenue' has to be read in conjunction with an erro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ould have valued the properties on the basis of the rental income only and not on the basis of the average of the two, i.e., cost of construction and rental method. In the orders passed by the Commissioner also it was clearly held that, in view of the aforesaid decision of the apex court the Wealth-tax Officer should have valued the property on the basis of the rental income only and not on the basis of the average of the two. To that extent the Tribunal's conclusions are erroneous. Additionally, on the factual position highlighted above, the Wealth-tax Officer's conclusion, relying on the registered valuer's report which proceeded on the basis of the average between two methods, is unsustainable. That being the position the Tribunal was no ..... X X X X Extracts X X X X X X X X Extracts X X X X
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