COMMISSIONER OF WEALTH TAX Vs. SHOBHARAM GAMBHIRMAL

JUDGEMENT

(1.) THE applicant (Commissioner of Wealth-tax, Bhopal), has filed this application under Section 27(3) of the Wealth-tax Act, 1957 (for short, "the Act"), seeking a direction to the Tribunal to state the case and to refer the proposed question of law as extracted below :

(2.) BRIEFLY stated, the facts of the case are that the assessee on the valuation date, i.e., March 31, 1973, was the owner of a house property with open land situated at 60, R.S. Bhandari Marg, Indore. The value of the property was shown in the return at Rs. 2,80,000 as per the report of an approved valuer. The Wealth-tax Officer referred the matter of valuation to the Valuation Officer under Section 16A of the Act. The valuation was made at Rs. 11,00,700. The assessee contended that as the property was under self-occupation, its value should be frozen under Section 7(4) of the Act. The Wealth-tax Officer rejected the contention and adopted the value at Rs. 11,00,700 as valued by the Valuation Officer. On appeal, the Appellate Assistant Commissioner held that the provisions of Section 7(4), though inserted by the Finance Act, 1976, with effect from April 1, 1976, were procedural in nature and were applicable to all cases pending on the date the above provision came into force. The officer, accordingly, fixed the value of the house property at Rs. 3,69,149 under Section 7(4) of the Act and directed the Wealth-tax Officer to adopt the above value for assessment. On adoption of such value, the value of urban immovable property owned by the assessee became less than Rs. 5 lakhs. It was, therefore, held that no additional wealth-tax was payable by the assessee. Aggrieved by the findings of the Appellate Assistant Commissioner, recorded in favour of the assessee, the Department filed an appeal before the Tribunal. The Tribunal considered the question as regards the applicability of Section 7(4) of the Act and held that the provision could be applied to all pending assessments as held by the Appellate Assistant Commissioner. The Tribunal also held that the aforesaid provision was procedural in nature and, therefore, applicable to pending cases. The appeal was, therefore, dismissed. The Department then sought a statement of the case and reference of a question under Section 27(1) of the Act. The application was rejected. The applicant, therefore, filed this application under Section 27(3) of the Act.

(3.) THE aforesaid provision laid down that the value of a house belonging to the assessee and exclusively used by him for residential purposes throughout the period of twelve months immediately preceding the valuation date may, at the option of the assessee, be taken to be the price which, in the opinion of the Assessing Officer, it would fetch if sold in the open market on the valuation date. THE aforesaid provision clearly indicates the procedure for the purpose of ascertaining the price and the circumstances under which such ascertainment is permissible. That being so, it is manifestly procedural in nature.