CWT Vs. CT. CHIDAMBARAM

JUDGEMENT

(1.) PURSUANT to the directions of this court in TCP Nos. 283 to 290 of 1992 dated 16 -11 -1992, the Tribunal has stated a case and referred the following question of law for our opinion with reference to the assessments. of two assessees, namely, CT. Chidambaram and CT. Karuppan Chetty for the assessment years 1979 -80 to 1982 -83 :

(2.) THE tax case references arise under the provisions of the Wealth Tax Act, 1957. The two assessees are brothers. They have one other brother, by name, CT. Muthukaruppan, and their grandfather was the owner of a large piece of land measuring 2,16,820 sq. ft. in Malaysia in a portion of which buildings were standing. On the death of the grandfather, the father of the three brothers became the owner of 1/5th interest in the property and on his death, each assessee became the owner of 1/15th share along with other brothers. In the original assessments made for the assessment years 1979 -80 to 1982 -83, the assessees returned the value of the property on the basis of the valuation certificate relating to the year 1980 -81. The Wealth Tax Officer determined the valuation of the Malaysian properties and enhanced the value by 50 per cent of the value returned by the assessee. Subsequently, it came to the knowledge of the department that a portion of the property was proposed to be acquired by the Malaysian Government in August, 1982. The Wealth Tax Officer also noticed that a portion of the vacant site with eleven houses in Julutang property was sold in August, 1982, and the assessees furnished the valuation report from the valuer at Pinang regarding the market value of the site of the property as on 1 -1 -1964. The Wealth Tax Officer came to the conclusion that the assessees have not offered the real value of the property and in the valuation report the site and houses in Julutang property were valued at a higher price as on 1 -1 -1964, and the said valuation report was filed for computation of capital gains under the Income Tax Act, 1961. From the above materials, the Wealth Tax Officer prima facie came to the conclusion that for the valuation of the Julutang property a lower figure was adopted and hence, reopened the assessments made for the assessment years 1979 -80 to 1982 -83 in the assessees cases and made reassessments under the relevant provisions of the Wealth Tax Act, 1957. Both the assessees preferred appeals challenging the orders of reassessment before the CWT(A).

(3.) AT the time of hearing of the reference, learned counsel for the assessee has placed before us a copy of the order passed in CT. Muthukaruppan case in WTA Nos. 417 to 419 and 446/Mds/1990, dated 27 -12 -1990, which was followed by the Tribunal in the instant case to hold that the Wealth Tax Officer was not justified in ordering reassessment. We have also gone through the said order of the Tribunal and the facts of the case are fully set out in the order. We find that the Tribunal in that case has found that any valuation at a figure other than that taken in the original assessments would be a mere change of opinion on material already on record apart from being arbitrary and without any basis at all. The Tribunal also noticed that there were no materials to make reassessments with respect to other items of property.