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TMI Blog1991 (11) TMI 7X X X X Extracts X X X X X X X X Extracts X X X X ..... this section) under this Act, the Wealth-tax Officer may refer the valuation of any asset to a Valuation Officer (a) in a case where the value of the asset as returned is in accordance with the estimate made by a registered valuer, if the Wealth-tax Officer is of opinion that the value so returned is less than its fair market value. " The short history of valuation of this property for the purpose of wealth-tax assessment is this that in April, 1955, the assessee let out this property to the Geological Survey of India at the rate of Rs. 4,000 per month as monthly rent. That continued until August, 1981, by which time the assessee had already made unsuccessful rounds of eviction proceedings against the Geological Survey of India both in the first court and in the appellate court. In August, 1981, the self-same property even though under the tenancy and occupation of the Geological Survey of India was sought to be leased out again by the assessee to one Messrs. Kothari Scientific and Research Institute. The terms were that so long as the Geological Survey of India continued in possession, Messrs. Kothari Scientific and Research Institute would pay Rs. 6,000 per month and in case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... would be higher than the value given in the registered valuer's valuation report then he may refer it to the Valuation Officer or he may also reserve it for his consideration at the time of the final wealth-tax assessment. If he, however, chooses the former course and does refer the valuation to the Valuation Officer then and in that event sub-section (6) of section 16A makes it clear that at the time of assessing wealth-tax he would be bound by the valuation put upon the property by the Valuation Officer. In the instant case, the choice was made for referring the valuation to the Valuation Officer and as such, the letter at page 69 written by the Wealth-tax Officer was inappropriate. In that letter dated December 6, 1989, the Wealth-tax Officer wrote that the objection regarding his reference for the valuation would be examined at the assessment stage. That was clearly wrong because once the Valuation Officer gives his report the Wealth-tax Officer would have no jurisdiction to consider or change it any further. The matter could then be changed if at all in appeal from the totality of the entire wealth-tax assessment. As such, the letter dated December 6, 1989, is inoperative ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n as being exercise of power without jurisdiction. Mr.Murarka also rightly relied upon the cases of Smt. Uma Debi Jhawar v. WTO [1982] 136 ITR 662 (Cal) and the case of M. V. Kibe v. CWT [1987] 168 ITR 82 (MP) for supporting the proposition of law that the existence of an opinion of the Wealth-tax Officer that the market value of the property exceeds the registered valuer's report is a must and a precondition before valid exercise of power for reference to the Valuation Officer. From the facts of this case, I am unable to come to this conclusion that the Wealth-tax Officer made the reference of the valuation to the Valuation Officer without harbouring an opinion that the market value would be larger than the valuation put by Dr. Nain. If the affidavit of the Wealth-tax Officer is read as a whole then even in paragraph 9, it is manifest that he is trying to say that he has made the reference to the Valuation Officer because ten per cent. interest rate, if used, would yield a valuation of the property which would be higher than the nine per cent. rate used in the report of Dr. Ashoke Nain. Even if the Wealth-tax Officer is bona fide of the opinion that the valuation put by the re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax Officer was vitiated in any manner. Seeing that nine per cent was already returned as per the valuation of the registered valuer, the Wealth-tax Officer could well take into account a possible ten per cent. rate for this valuation on the ground of the circulated draft amendment rules which he wrongly thought to have actually effected the amendment, and he could thus on this bona fide belief of the market value being higher than the registered valuer's report refer the matter to the Valuation Officer. Mr. Murarka also relied upon the cases of J. N. Bose v. CWT [1976] 104 ITR 83 (Cal), and he relied upon a passage at page 88 for the proposition that unless there has been certain substantial changes in the facts of the case or the situation or present position of the property, the valuation that was being proceeded upon should be proceeded upon in the subsequent assessment years also. He said that the valuation of the new valuer, that is Dr. Nain, had been accepted for the assessment year 1982-83 up to the assessment year 1985-86. In issue in this case are the pending assessments for the assessment years 1986-87 to 1988-89. There is nothing in law for the Wealth-tax Officer to e ..... X X X X Extracts X X X X X X X X Extracts X X X X
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