COMMISSIONER OF WEALTH TAX Vs. M RAMACHANDRAN

JUDGEMENT

(1.) THE following questions have been referred for our opinion under the provisions of the Wealth -tax Act, 1957 : '(1) Whether, on the facts and in the circumstances of the case, the reopening of the assessments for the years 1964 -65 to 1971 -72 were under section 17(1)(b) of the Wealth -tax Act and not under section 17(1)(a) of the Wealth -tax Act ? (2) Whether, on the facts and in the circumstances of the case, the valuer's report for the subsequent years cannot be treated as information for reopening the earlier year's assessment under section 17(1)(b) of the Wealth -tax Act ?'

(2.) THE assessment years are 1964 -65 to 1971 -72. The assessments were completed initially on March 23, 1973. Within four days, notices under section 17 were issued and served on the assessee. The reason for this is stated in the statement of the case thus : 'The assessee has filed a valuer's report dated January 12, 1973, wherein the value of property known as Madumbai property is shown at Rs. 37,38,378. The valuer has allowed as deduction a sum of Rs. 7,69,500 towards layout charges. This deduction is not properly allowable because the layout charges are of contingent nature. Besides, the valuer has adopted different rates varying from Rs. 90 to Rs. 180 per sq. yd. on the basis of disallowance of layout charges of Rs. 7,69,500 and valuing the entire land at Rs. 180 per sq. yd. the total value of Mudumbai property comes to Rs. 45,08,378. The assessee's share [1/12th thereof] comes to Rs. 3,75,698 as against the assessee's value of Rs. 1,26,778.'

(3.) HERE itself, we may note that the assessing authority actually referred the question of valuation to the valuation cell. The reopening of the assessment was on several grounds and one such ground was that the earlier valuer had allowed certain layout charges, which were not allowable, since layout charges were of a contingent nature. Further, the rate adopted by the valuer vastly varied. Thus, it cannot be said that the reopening of the assessments was solely on the basis of the subsequent report of the valuer. The ultimate valuation done by the Wealth -tax Officer was on the basis of the report of the valuer consequent on a reference by him, and after re -opening the assessments. A perusal of the revised assessment orders reveals that the valuer made the valuation with reference to each of the relevant valuation date. The valuation by the expert (i.e., the valuer) was not as on any subsequent date and this is not a case where the assessing authority estimated the valuation of the property by going backwards by applying any percentage of deduction form the value of the properties furnished by the valuer with reference to a subsequent year.