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TMI Blog1990 (3) TMI 97X X X X Extracts X X X X X X X X Extracts X X X X ..... . yr. Declared value Assessed by WTO value determined by CWT (A) . Rs. Rs. Rs. 1976-77 4,17,600 6,20,000 5,55,000 (as per D.R.) 1977-78 4,17,600 6,20,000 6,20,000 . 1981-82 4,28,600 9,55,200 6,75,000 . 1982-83 4,28,600 10,50,200 6,75,000 . 1983-84 4,28,600 10,80,300 7,40,000 . 4. The learned counsel for the assessee submitted that the aforesaid property is owned by three brothers. So far as the assessee's portion, which is the subject-matter of valuation in the present appeals is concerned, some of the portions are let out to the tenants for small scale industries, workshops, godowns, warehousing, etc. and the remaining portion is occupied by the assessee for his small scale factory. The assessee's property, forming a part of the old Laxmi Vijay Hosiery Factory comprises of ground floor structures on the land admeasuring 12,305 sq. yds. and bears S. Nos. F.P. No. 10/Pt. of T.P. S. No. 30 of Ahmedabad. It has been submitted that there is neither any possibility for the assessee to oust the protective ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... " 1974-75 1975-76 Rs. 5,55,000 " 1978-79 1979-80 Rs. 6,20,000 It was contended that the Tribunal in the aforesaid order has not given any decision as to which method will be the proper method for valuation of the said property. The Tribunal has held that the point regarding valuation of this property could be conveniently disposed of without going into the question of proper method of valuation which should be followed as ultimately it is a question of estimate. Having regard to the figures available and the totality of the facts and circumstances obtaining in the case, the Tribunal was of the view that it would meet the ends of justice if the value of the property in question was estimated at the above figures in the different years. It was urged by the learned counsel that the said decision of the Tribunal in other years will not disentitle the assessee to agitate its claim once again that the value of the aforesaid property should be made according to rent capitalisation method. The approved valuer has given detailed reasons in support of adopting the rent capitalisation method for valuing the aforesaid property in the hands of the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... resaid property during all the years under consideration. He submitted that s. 3 of the WT Act is a charging section and the assessee is liable to pay wealth-tax on the net wealth as may be computed in accordance with the other provisions of WT Act. Sec. 7 only provides for the method and mode of valuation of the assets and, therefore, the same should be applied with retrospective effect in relation to all pending assessments for earlier years. 5. The learned Departmental Representative contended that the matter relating to valuation of this very property has been considered by the Tribunal in the assessee's own case for asst. yrs. 1965-66 to 1975-76 and 1978-79 and 1979-80 vide order dt. 14th Oct., 1987. The Tribunal also considered the assessee's contention that the said property should be valued according to rent capitalisation method. After considering all the relevant facts and submissions made on behalf of the assessee, the Tribunal has determined the value of the aforesaid property as mentioned in para 7 of its order. The property continues to be the same. It also continues to be occupied by same tenants and the portion occupied by the owner also is same as in previous ye ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at a lesser figure than that arrived at by the registered valuer he cannot be denied that benefit and that there was no merit in the contention that the assessee having returned higher value, cannot take advantage of r. 1BB to claim reduction in the valuation. 7. We have carefully considered the rival submissions. The CWT (A), in a sense, has held that the valuation of this property in the various years under consideration should be determined on the basis of Tribunal's order dt. 14th Oct., 1987. At the time when the Tribunal gave that decision, the rules relating to valuation contained in Sch. III were not in existence which has now been introduced by the Direct Tax Laws (Amendment) Act, 1989. At the time of moving the Direct Tax Laws (Amendment) Bill, 1988, the speech of the Finance Minister contained the following (Extract from (1989) 176 ITR (St) 142): "The proposal to incorporate the rules of valuation of assets in the WT Act by way of a Schedule to the Act is with a view to providing certainty in the matter of assessment and reducing litigation on this account. As a result of the proposal, the concept of market value will be applicable to the valuation of assets only i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... idable litigation and bring about certainly and uniformity in the matter of valuation of such an asset. It is also evident from the above referred press note that the principles embedded in the existing r. 1BB has now been given statutory recognition and have been made part of the Act itself as such rule relating to valuation are now incorporated in Sch. III referred to in s. 7(1) of the WT Act. 7.3 The Hon'ble Gujarat High Court in the case of CWT vs. Kasturbhai Mayabhai and CWT vs. Niranjan Narottam has clearly held that all the provisions contained in s. 7 of the WT Act deal with the mode or method of determination of the value of assets of the assessee for the purpose of assessing to wealth-tax on the net wealth of the assessee as provided in s. 3, the charging section. All the sub-sections of s. 7 have to be r/w s. 3 and the value of any asset determined in accordance with any of them would be the value of the asset on the corresponding valuation date for the purpose of determining the net wealth and levying tax thereon. The definition of 'net wealth' in s. 2(m) also makes it clear that the net wealth is the amount of the aggregate value of all the assets of the assessee co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be held to be a machinery section, since it also provides for an alternative method of valuation at the option of the assessee. In our opinion, therefore, sub-s. (4) which provides for an alternative method of valuation is procedural and not a substantive provision of law. And even if it confers upon the assessee a right to exercise an option to value his aforesaid asset under either sub-s. (1) or sub-s. (4), it is not taken out of the domain of procedure or machinery. Such right is in the procedural field. The question whether or not sub-s. (2) of s. 7 has retrospective operation had not come up for consideration in any of the decisions referred to above and, therefore, the decisions do not throw any light on the question whether it has to be given retrospective operation. However, as observed by Wright, J. in Re Atlhumney (1898) 2 QB 547, 551, the rule of construction firmly established is that retrospective operation is not to be given to a statute so as to impair the existing right or obligation otherwise than as regards the matter of procedure unless that effect cannot be avoided without doing violence to the language of the enactment. Sub-s. (4), as observed above, is in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assets. Since these new rules relating to valuation of properties now embedded in Sch. III are beneficial provisions, the same should apply to all proceedings and the assessee should have the choice to get the immovable properties valued according to these rules even with respect to the years under consideration. 7.6 Even if the rules relating to valuation of assets contained in Sch. III are not retrospective, these rules only provide for a definite and certain formula for working out the value of immovable property according to rental method of valuation. The various Courts and various Benches of the Tribunal have taken a view that in case the property is partly occupied by tenants and partly by the owner the valuation should be made by applying certain multiplier to the net maintainable rent. Different Courts and different Benches of the Tribunal from time to time have applied different multipliers. For instance, the Tribunal, Ahmedabad Bench in the case of WTO vs. Manibhen Jainsingbhai adopted the rate of capitalisation at 8.33 times while in various other cases the multiplier of 10, 11 or 12.5 times have been taken. The legislature in its wisdom has now provided in the afor ..... X X X X Extracts X X X X X X X X Extracts X X X X
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