COMMISSIONER OF WEALTH TAX Vs. NAGESWARA RAO A

JUDGEMENT

(1.) PURSUANT to the order passed by the High Court under s. 27(3) of the WT Act in WTC Nos. 16, 19, 29 and 31 of 1984, dt. 20th September, 1982, the Tribunal has referred the following two questions to the High Court for its opinion :

(2.) THE facts of the case lie in a narrow compass. THE WTO passed four separate orders for the asst. yrs. 1971-72, 1972-73, 1973-74 and 1974-75, on 29th December, 1978, wherein it has accepted the valuation of a residential building of the assessee situated in Banjara Hills, Hyderabad, at Rs. 2,39,946, Rs. 2,78,300, Rs. 2,78,300 and Rs. 3,00,000, respectively, but disallowed the liability to the Life Insurance Corporation to the extent of Rs. 11,000 and passed the assessment orders accordingly. THE respondent-assessee had instituted four separate appeals before the AAC challenging the disallowance of the liability to the Life Insurance Corporation. THE appeals were dismissed by the AAC vide his order dt. 18th August, 1979. THE CWT exercising powers under s. 25(2) of the WT Act and taking the view that the values of the property of the assessee as given by him and accepted by the WTO were erroneous and prejudicial to the Revenue because the values were underestimated, directed the WTO for fresh assessment. THE assessee took the matter to the Tribunal which allowed the appeal holding that the order of the WTO has merged with the order of the AAC dt. 18th August, 1979, and the subsequent report of the Valuation Officer could not constitute material for revising the assessments, set aside the order of the CIT.

(3.) RELYING on the cases of State of Madras vs. Madurai Mills Co. Ltd. and Kaliki Veera Reddy & Co. vs. State of Andhra Pradesh (1974) 34 STC 517 (AP), it has been contended by learned standing counsel for the applicant-Department that the WTO has accepted the valuation of the property in question as given by the assessee-respondent and has disallowed the liability to the Life Insurance Corporation, therefore, the assessee-respondent has challenged only that part of the orders of assessment in the appellate Court, which had dismissed the appeals. Therefore, it cannot be said that the orders of the WTO had merged with the order of the AAC dt. 18th August, 1979, with the result the CWT had jurisdiction to revise the order of the AO and to pass appropriate orders. It has been further contended that the CIT has based his finding only on the valuation report of the engineers which was already on record before the WTO at the time of passing the impugned orders of assessment and, therefore, it cannot be said that he had relied on any material which was brought on record subsequent to the passing of the impugned orders. Even otherwise, Expln. (b) to s. 25(2) of the WT Act defines the word "record" as "record shall include and shall be deemed always to have included all records relating to any proceeding under this Act available at the time of examination by the Commissioner", and, therefore, even if it is assumed for the sake of arguments, that the CWT had taken into consideration the subsequent report of the Valuation Officer the impugned order passed by the CWT cannot be attacked on this count.