V JAYARAMAN Vs. WEALTH-TAX OFFICER

JUDGEMENT

(1.) These appeals by the two separate remaindermen of the property at Jail Road, Coimbatore are consolidated and disposed of by a common order for the sake of convenience as the issue involved is similar and arises from similar orders passed by the Commissioner under section 25(2) of the Wealth-tax Act, 1957 (the Act).

(2.) Late Shri G. D. Naidu gifted certain properties at Jail Road, by way of settlement on 12-12-1940 to his daughter Smt. V. Krishnammal for her life and thereafter to her sons and daughters equally and the sons daughters of her predeceased sons and daughters to get the properties per stripes holding the same absolutely. For the assessment year 1976-77 for which the valuation date is 31-3-1976, the share of the remaindermen shown at Rs. 2,57.500 in the case of Shri V. Jayaraman and Rs. 5,15,000 in the case of Shri V. Rajendran were accepted by the WTO in his orders dated 26-3-1981. Subsequently, the DVO valued such interest at Rs. 4,75,028 in respect of Shri V. Jayaraman and at Rs. 9,50,000 in the case of Shri V. Rajendran. In the light of the departmental valuation of the interest of the remaindermen, the Commissioner considered that the orders passed by the WTO were erroneous and prejudicial to the interest of the revenue in terms of section 25(2). After giving show-cause notice and considering the objections raised by the remaindermen the Commissioner held that the value adopted by the WTO was not correct market value of the property on the valuation date which is evidenced by the departmental valuation report. Although, this information was obtained subsequent to the completion of assessments by the WTO he could rely on such information for the purpose of revision under section 25(2). Accordingly, he set aside the assessments made by the WTO and directed him to make fresh assessments after giving the assessees reasonable and sufficient opportunity of being heard and in accordance with the law.

(3.) The remaindermen have raised several grounds to the effect that the orders passed by the WTO were not erroneous and prejudicial to the interests of the revenue to warrant revision under section 25(2) and the value of the remaindermen could be equated to the total value of the property excluding the life interest of the life tenants and the revision order indirectly extended the time limit for completion of the assessments.