DINA NATH Vs. CONTROLLER OF ESTATE DUTY

JUDGEMENT

(1.) ON June 12, 1957, Jaswanti Devi died leaving her only son, Dina Nath, as her heir and assets, both movable and immovable, the last mentioned including what has been described as Shri Karam Chand Jain Market in the heart of Jullundur City. In the years 1950-51 the old construction having been demolished, the deceased constructed a new building in the shape of a market over an area of 3 Kanals, 5 Marias, and 20 square-feet as stated, in the heart of Jullundur City, with covered built area on the ground floor 7,627 square-feet and on the first floor 5,363 square-feet. The property comprised of among other parts of the building 41 shops. On the first floor 16 rooms have been with Jain Brotherhood for religious purposes. The Assistant Controller of Estate Duty, Amritsar, in his order of December 30, 1958, gives detailed description of the property and the quality of the material used and the quality of the construction of the building. So this building was constructed by the deceased in the year 1950-51.

(2.) AFTER the death of Jaswanti Devi, deceased, proceedings were started by the Assistant Controller of Estate Duty for payment of estate duty on the estate left by the deceased in the hands of her son. He filed a statement of account in regard to the estate of his deceased mother, and the only item which is a matter of controversy here in this reference is the valuation of the property named and styled as Shri Karam Chand Jain Market in Jullundur City, Dina Nath in his statement of account valued that property at Rs. 78,000, showing its annual rental at Rs. 18,000. At that annual rental the value of this building would be recovered in 4 1/2 years. He produced two letters from property dealers one fixing the value of this property at Rs. 1,00,000 and the other fixing it at Rs. 1,10,000 but this material was not accepted by the Assistant Controller of Estate Duty and was not even subsequently relied upon before the Central Board of Revenue in appeal. The Assistant Controller of Estate Duty not having accepted those two letters as satisfactory and reliable evidence in the case in regard to the market value of this particular property on the date of the death of the deceased, the accountable person, Dina Nath, produced a certificate from a chartered engineer, Mr. Hari Chand, in regard to the market value of the property on the crucial date. With regard to this certificate the Assistant Controller of Estate Duty proceeded to say that :

(3.) SO the Assistant Controller of Estate Duty rejected the certificate of the chartered engineer as to the market value of this property on the date of the death of the deceased, because it has proceeded to valuation on considerations either non-existent or not germane such as : (a) the Maria tax which has never been imposed, (b) the prevailing political unrest in this frontier province for which there has neither been any material nor it has affected the value of the property in Jullundur City, and (c) that the building in question is a big building, which is hardly any consideration because even a big building, if it comes to the question of its disposal, may be available for disposal in parts. The Assistant Controller of Estate Duty also found the method of assessing the actual cost of the building not satisfactory in relation to a given increase over the pre-war schedule of rates of the Public Works Department. These are apparently sound reasons on the basis of which it was open to the Assistant Controller of Estate Duty not to accept the valuation certificate of this chartered engineer. This officer then proceeded to value this property on the basis of rental method. He took the gross letting value of the property on the date of the death of the deceased at Rs. 18,836 and adding to it Rs. 160 per mensem as the gross letting value for the portion of the building in the occupation of the religious brotherhood, he arrived at its gross annual letting value as a whole at Rs. 20,756. Making allowances for repairs, municipal taxes, property tax, and collection charges, he arrived at the net annual letting value of this property at Rs. 13,349, which he capitalised twenty times, thus arriving at the figure of Rs. 2,66,980 as the market value of this property on the date of the death of the deceased for the matter of accountability for estate duty. The person accountable filed an appeal against the order of the Assistant Controller of Estate Duty which appeal was heard and disposed of by the Central Board of Revenue on October 28, 1960. The only matter that was urged on the side of the person accountable on this aspect of the matter was the report of the chartered engineer as to valuation of this property. In the appellate order of the Central Board of Revenue the chartered engineer has been described as "the approved valuer", and obviously that means that he was a valuer approved under Section 4 (1) (c) and (3) of the Estate Duty Act, 1953 (Act No. 34 of 1953 ). It was urged that the report of the approved valuer in this case being that of an expert was conclusive having regard to Sections 45 and 114 of the Evidence Act unless it was shown that it was not correct, and it was said that that was not shown. The Central Board of Revenue found that the report of the approved valuer was neither correct nor reliable and proceeded to observe that: