COMMISSIONER OF WEALTH TAX Vs. B INDIRA DEVI

JUDGEMENT

(1.) THESE references are under s. 27(1) of the WT Act, 1957. The question referred is :

(2.) THE matter arises out of WT assessment for the asst. yrs. 1976-77 and 1977-78 for which the relevant valuation dates are 31st March, 1976 and 31st March, 1977 respectively. The original assessment for the asst. yr. 1976-77 was completed on 28th March, 1981. The valuation of M/s Rajadhani Tourist Home, an item of property belonging to the assessee was adopted as Rs. 1,39,595. This was so fixed on the basis of the value as per the balance-sheet. During the assessment proceedings for the year 1977-78, the WTO referred the valuation of the property to the Valuation Cell on 22nd Jan., 1982, under s. 16A of the Act. Before the valuation report was received the assessment was completed on 31st March, 1982. It appears that the assessment was so done to get over the bar of limitation. While passing the order of assessment the WTO adopted the average of the value of cost of construction and the cost as per the rent capitalisation method. The value so arrived at was Rs. 4,96,941. The Valuation Cell submitted its report on 20th Aug., 1982 fixing the value at Rs. 8,42,000. The CWT invoked his revisional power under s. 25(2) of the Act in relation to both years of assessment. According to him, even though no reference was made to the Valuation Cell for the asst. yr. 1976-77, the report subsequently submitted was information as regards the correct value of the property and that on that basis it was clear that there was an error on the face of record with regard to valuation, which was prejudicial to the interest of Revenue. With regard to the asst. yr. 1977-78, the CWT took the view that the valuation report received subsequent to the completion of the assessment forms part of records and that the assessment was also erroneous and prejudicial to the interest of Revenue. By order dt. 26th March, 1983 the CWT held the order passed by the WTO to be erroneous and, therefore, prejudicial to the interest of Revenue. Consequently, he set aside the orders of assessment and directed the WTO to adopt fresh valuation and pass fresh order, according to law after giving due opportunity to the assessee.

(3.) THE short question that arises for consideration in these references is whether the CWT was justified in looking into the report of the Valuation Officer for coming to the conclusion that the order of assessment was erroneous and prejudicial to the interest of Revenue.