COMMISSIONER OF WEALTH TAX Vs. B VIJAYAKUMAR

JUDGEMENT

(1.) THE common question referred in these tax cases which relate to the three assessment years 1970-71 to 1972-73 is, "as to whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in holding that the reassessments made under the Wealth-tax Act for the assessment years 1970-71 to 1972-73 are invalid in law and should therefore be cancelled ?"

(2.) THE reassessment for those years came to be made on the basis of a report given by the audit party to the Assessing Officer, and in the order of reassessment made on October 30, 1976, the Wealth-tax Officer has stated, inter alia, in the assessment order, that "at the time of the audit of the record, the Revenue audit pointed out the resultant inadequacy in the intrinsic value of the unquoted shares due to excess deduction of liability over and above what is contemplated under Explanation II(ii)(e) of Rule 1D of the Wealth-tax Rules, 1957".

(3.) THOUGH the reassessment is in accordance with the law subsequently laid down by the apex court, we must, having regard to the facts and in the circumstances of the case, hold that the Tribunal was not in error in upholding the assessee's objection to the reassessment on the ground that the reassessment, could not have been validly made on the basis of the view communicated to the Assessing Officer by the audit party, which amounted to the interpretation of the rule, rather than merely inviting the attention of the officer to the existence of the rule.