BALKRISHNA HARIVALLABHDAS HUF Vs. WEALTH TAX OFFICER

JUDGEMENT

(1.) THE petitioner by filing this petition has prayed to quash the reference made by the WTO to the District Valuation Officer.

(2.) THE petitioner, an HUF, is an assessee under the WT Act, 1957 (hereinafter referred to as the Act). Respondent No. 1 is WTO and respondent No. 2 is District Valuation Officer, under provisions of the Act. Respondent No. 2 Valuation Officer is responsible for valuing immovable properties at the instance of the WTO. The petitioner had immovable property of land with a building thereon. WTO, somewhere in 1974, took up the assessment of the immovable property of petitioner for the asst. yrs. 1966 67 to 1973 74 under the Act, and referred the matter for valuation of the property to the District Valuation Officer. After following the procedure laid down under the Act, District Valuation Officer passed an order under S. 16A(5), fixing the market value of the property, vide Annexure "C". WTO passed assessment order under S. 16(3) of the Act adopting the fair market value fixed by the District Valuation Officer for each of the years, vide Annexures E.1 to E.7, all dt. 28th Feb., 1977. CWT passed an order under S. 25(2) of the Act, as on examining the records of the proceedings under the Act for the asst. year 1966 67, it was noticed that there was an increase in the value of the building due to additional construction to the tune of Rs. 1,70,322 and purchase of furniture and fixture worth Rs. 1,24,411. This increase in the value of assets has been attributed to the increase in the amount of loan in the account of Harivallabhdas Kalidas (HUF) to which account amount of Rs. 48,622 has been paid by way of interest. As per the order, it appears that the WTO while computing the net wealth, allowed exemption in respect of both these assets. The amount of debt has been utilised for acquiring assets, and, therefore, it should have been disallowed as observed by the CWT. The CWT, therefore, was of the view that the order dt. 28th Feb., 1977, passed by the WTO was erroneous insofar as it is prejudicial to the interest of Revenue. A notice was, therefore, issued, and after hearing, the CWT set aside the order of assessment and directed the WTO to review the assessment in accordance with law. The order passed by the CWT are annexed to the petition at Annexure H.1 to H.7. Against these orders, the petitioner preferred appeals to the Tribunal. However, by a composite order at Annexure "J", the Tribunal rejected the appeals on 30th May, 1988. The Tribunal observed that :

(3.) ACCORDING to the learned advocate for the petitioner, even if the order of Tribunal is read, it is very clear that the submissions with regard to investment in non taxable items has been rejected and the inquiry was meant for a limited purpose and that too for the investment in non taxable assets only. Learned counsel submitted that in the order there is nothing which permits to make a fresh reference to District Valuation Officer by the WTO. Order under S. 16A(5) of the WT Act has been passed by the WTO which has become final and on that basis order of assessment for various years have been passed by the Assessing Officer. Two items which were allowed by the WTO while computing are disallowed by these orders. Therefore, what the WTO is now required to do is to make the assessment keeping in mind the finding about these two items only and nothing further. In view of this, it is clear that the fresh reference made by the WTO to the District Valuation Officer and in consequence letter issued by District Valuation Officer at Annx. "Q"dt. 15th July, 1982 informing the petitioner that the case is referred for revaluation by WTO and such other notices are required to be quashed and set aside. As a consequence of this, further proceedings insofar as it relates to the fresh reference to the Valuation Officer is concerned is quashed and set aside. In the result, the petition is allowed with no order as to costs.