COMMISSIONER OF WEALTH-TAX Vs. MRS. SARA VARGHESE

JUDGEMENT

(1.) AT the instance of the revenue, the Tribunal has referred the following question of law for the decision of this Court:

(2.) WE heard the counsel for the revenue as also the counsel for the assessee. The counsel for the revenue submitted that though the revenue prayed for referring three questions of law, this Court directed reference of only one of the questions, the question formulated herein above, holding that the above question is comprehensive enough to take in the other points covered by the two other questions. It was argued that the Tribunal totally erred in fixing the value of the property for the assessment year 1973 -74 at Rs. 250 per cent. The value obtained for the same property soon after the valuation date from the Housing Board at Rs. 440 per cent is a strong item of evidence which was not given due weight by the Tribunal. What is more, the Tribunal referred to the valuation of rubber estates in the year 1969 near Thodupuzha and based on that the Tribunal arrived at the valuation of the instant property which is situate at a different place, in Ernakulam town. These two aspects have totally vitiated the conclusion of the Tribunal. So, the counsel for the revenue submitted that the manner and method of valuation of the rubber estate by the Tribunal is wholly erroneous and unjustified in law. The counsel for the respondent -assessee submitted that the question of law referred for decision of this Court at the instance of the revenue is really a question of fact and no question of law arises out of the appellate order of the Tribunal dated 28 -10 -1980. It was further argued that the determination of the value on the valuation date is largely one of fact, and as a final fact -finding authority it is for the Tribunal to advert to all relevant facts and circumstances and determine the value. The Tribunal has referred to the valuation of the rubber estate in Thodupuzha, though the instant property is situate at Ernakulam. By reference to the particular category of property (rubber estates) , the Tribunal fixed the value at Rs. 250 per cent for the property in question after giving due credit to the situation of the property in the instant case, namely, that it is in the neighbouring area of Kalamassery and the area has become anised by them. We are of opinion that the question regarding valuation of property is purely a question of fact and no question of law can ordinarily arise unless there is a violation or non -adherence to the principles of valuation - CWT v. Himalaya Trading Co., [1987] 168 ITR 586 (Del) . Keeping in mind the principles laid down in the said decision, we are of the view that the question referred to this Court by the Tribunal, is not a question of law, but purely a question of fact.

(3.) EVEN on merits, we are of the view that the decision of the Tribunal cannot be said to be legally unsustainable. Regarding valuation, what we are concerned is the market value of the property. It is the price which a willing buyer will pay to a willing seller. It will vary from case to case. Valuation is not an exact science. Mathematical calculation is not possible. Money value attributable to the asset should be decided and estimated by the concerned statutory authority in a reasonable and judicial manner on the basis of the facts and circumstances available before him. Valuation should be made objectively and should be based on some material. Even in cases where the asset to be valued has no real market, it is for the assessing authority to fix a notional market value. A hypothetical market is contemplated. Imponderables are involved in the matter of valuation. Some of the principles to be borne in mind in that direction have been stated in the Bench decision of this Court in CIT v. P.I. George : [1988] 171 ITR 620/ 39 Taxman 148. Decisions are legion dealing aspects regarding valuation. The qualitative and quantitative analysis in the matter of valuation will differ, from asset to asset, from place to place, and also considering the particular statute for which the valuation and price of the property has to be determined. It cannot be a wooden rule. Different methods and approaches necessary in the context of different statutes, under which the market value of an asset has got to be determined, pose difficult problems. The market value has got to be fixed with reference to the particular statute. The approach will differ, according to the nature of the statute - fiscal statutes and non -fiscal statutes. Among the non -fiscal statutes Land Acquisition Act is an important legislation. Among the fiscal statutes, Income -tax Act, 1961, Wealth -tax Act, 1957, Gift -tax Act, 1958, Municipalities Act, etc., are important. In fixing the market value of a particular asset or property, the approach and analysis is likely to vary according to the subject -matter of legislation. The principles that are ordinarily applied in the case of non -fiscal statutes like Land Acquisition Act, cannot be applied mechanically in cases arising under fiscal statutes. These aspects have been dealt with in CIT v. Smt. Vimlaben Bhagwandas Patel : [1979] 118 ITR 134 at pp. 188 and 191 (Guj.) and in Commissioner of Succession Duties v. Executor Trustee & Agency Company of South Australia Ltd., 74 CLR 358 at p. 373 and in the Bench decision of this Court in P.I. George's case (supra) . It will be useful to bear in mind what Dixon J., said in Executor Trustees & Agency Company of South Australia Ltd.'s case (supra) :