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TMI Blog1996 (7) TMI 174X X X X Extracts X X X X X X X X Extracts X X X X ..... learned Commissioner of Wealth-tax (Appeals) to enhance the value to Rs. 48,00,000 (Rupees forty-eight lakhs) or at all. 2. That on a proper appreciation of the facts and circumstances of the case and of the principles of law involved it must be held that the learned Commissioner of Wealth-tax (Appeals) misdirected himself in holding that the provisions of Rule 8 and/or Rule 20 of Schedule III were applicable for valuation of the aforementioned property. 3. That the order for enhancement of the total wealth is bad in law for having been made without giving proper opportunity of being heard to the Appellant and/or for other infirmities in the appellate order." 2. We are concerned with the assessment year 1989-90. The short point in disp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessing Officer is not justified in disallowing the claim of the assessee. The first appellate authority has accepted this part of the contention of the assessee and directed the Assessing Officer accordingly. However, the CWT(A) was of the opinion that the property having been offered for sale at Rs. 48 lakhs, the value as on the valuation date, i.e., as on 31-3-1989, could not be less than Rs. 48 lakhs. On this basis he was also of the opinion that the property could not be valued as per rule 3 of Schedule III, inasmuch as, the same is excluded by the operation of rule 8/rule 20 of Schedule III. In response to the enhancement notice by the CWT(A), the assessee contended that the valuation of the immovable property was shown by the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - (i) the sum for which the house might reasonably be expected to let from year to year ; or (ii) where the house is let and the annual rent received or receivable by the owner in respect thereof is in excess of the sum referred to in sub-clause (i), the amount so received or receivable : " " (5) Nothing contained in this rule shall apply-- (i) where, having regard to the facts and circumstances of the case, the Wealth-tax Officer, with the previous approval of the Inspecting Assistant Commissioner, is of opinion that it is not practicable to apply the provision of this rule to such a case ; or " 7. With effect from 1-4-1989, by the Direct Tax Laws (Amendment) Act, 1989, section 7(1) has been amended as follows : " 7(1). Subject to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pon rule 8(a) of the Schedule III wherein it was stated that if, in the opinion of the Assessing Officer, it is not practicable to apply the provisions of rule 3, then the property shall be valued in the manner laid down in rule 20, i. e., the value which could be fetched if sold in the open market on the valuation date. 10. On a careful reading of rule 8 we find that the normal procedure for computation of the value of the property in accordance with rule 3, can be bypassed only when the Assessing Officer forms an opinion that it is not practicable to apply the provisions of rule 3. The crucial words in the aforementioned sentence is the word ' practicable '. From a reading of section 7/rules in the schedule, we find that wherever the Le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sation method as per rule 3, such situation can be considered as not ' practicable ' and even under such circumstance, the Assessing Officer has to take the prior approval of the Dy. Commissioner of Income-tax so as to apply the procedure under rule 20. Merely because the value as per the agreement of sale is higher than the value as worked out under rule 3, the valuation as arrived at under rule 3 cannot be considered as impracticable. In other words, the Legislature having incorporated separate provisions for adopting higher value than the value that could be arrived at under rule 3, the word ' practicable ' cannot be stretched and applied to a situation where by applying a different valuation or realistic value, the value of the property ..... X X X X Extracts X X X X X X X X Extracts X X X X
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