COMMISSIONER OF WEALTH TAX Vs. PHOOL CHAND

JUDGEMENT

(1.) The Tribunal, New Delhi, has referred the following question of law under Section 27(2) of the WT Act, 1957 (hereinafter referred to as the Act), for opinion of this Court :

(2.) Briefly stated the facts giving rise to the present reference are as follows : The assessee opposite party is an individual, who owned a cinema building, the construction of which was completed on 31st March, 1970. It started running the cinema w.e.f. 20th April, 1970. While framing the assessment under the Act, the WTO referred the valuation of the cinema building to a valuation officer. According to the valuer the value of the property as on 31st March, 1970, and 31st March, 1971, was taken at Rs. 3,63,330 in each of the two asst. yrs. 1970-71 and 1971-72. It appears that the valuation officer has given his report on the basis of costs of land and construction thereon. Later on, another valuation officer of the Department gave the valuation report in respect of the cinema building as on 31st March, 1972, valuing at a higher figure of Rs. 7,61,600. This report was given on the basis of yield method and was adopted by the WTO for the asst. yrs. 1972-73, 1973-74 and 1974-75. On the basis of the subsequent report of the valuation officer, the CWT considered the assessment order for the asst. yr. 1970-71 to be erroneous and prejudicial to the interest of the Revenue and initiated proceedings under Section 25(2) of the Act. After giving opportunity of hearing to the assessee, he cancelled the assessment and directed the WTO to reframe the assessment afresh after obtaining another report from the valuation officer. Similar order was passed for the asst. yr. 1971- 72 also. The assessee feeling aggrieved preferred an appeal before the Tribunal, which allowed the appeals and cancelled the orders passed by the CWT under Section 25(2) of the Act on the ground that subsequent valuation report could not have been taken into consideration while initiating proceedings under Section 25 of the Act.

(3.) We have heard Sri Shambhu Chopra, learned standing counsel for the Revenue. Sri Diwakar Rai Sharma has put in appearance (sic-on behalf) of the assessee.