Smt. Rajshuri vs Commissioner Of Wealth-Tax
1986 Latest Caselaw 50 Del

JUDGMENT

S. Ranganathan, J.

1. These are three applications under section 27(3) of the Wealth-tax Act. The assessed who is the petitioner prays that this court should direct the Tribunal to state a case and refer the following questions, said to be questions of law arising out of the Tribunal's orders, for the decision of this court :

"1. Whether, the learned Tribunal was justified in ignoring the applicability of the provision of rule 1BB in valuation of the property 6, Friends Colony, New Delhi, owned by the petitioner, which being a procedural provision was both retrospective and mandatory.

2. Whether, the learned Tribunal was justified in upholding the valuation by land and building method in respect of the property 6, Friends Colony, New Delhi, as against the rent yield method ignoring the well-settled principles laid down by different courts including the Supreme Court in the case of Dewan Daulat Rai Kapoor v. New Delhi Municipal Committee [1980] 122 ITR 700 to the effect that valuation of properties in areas subject to rent control provisions should be made on the rent yields method, i.e., on the basis of rent realisable under the Rent Control Act, specially when rent of the property had already been fixed by the District Judge at Rs. 25,000 per annum ?

3. Whether, the learned Tribunal had not acted arbitrarily and without any evidence in valuing the land at Rs. 120 per sq. yd. when the evidence on record allowed that the land in the vicinity was sold at Rs. 70 to Rs. 75 per sq. yard at the relevant time ?

4. Whether, the learned Tribunal had not applied a wrong principle of law in enhancing the value of the said property to Rs. 8,51,400, Rs. 8,88,400 and Rs. 8,96,200 for the assessment years 1973-74,1974-75 and 1975-76 respectively as against Rs. 5,85,000 returned by the petitioner ?

5. Whether, the learned Tribunal was justified in law in adopting the land and building method in valuation of the said property ignoring the effect of the Rent Control Act, and the rent yield method specially when the rent of the said property had been fixed by the District Judge, Delhi at Rs. 25,000 per annum ?

6. Whether, the learned Tribunal was justified in ignoring the effect of Urban Land (Ceiling and Regulation) Act, 1976, on the valuation of the said property according to which substantial portion of the land may be subject to acquisition proceeding being surplus and which was accepted even by the valuation officer of the Department."

2. The above questions are common in respect of three assessment years 1973-74 to 1975-76. The assessed had earlier asked the Tribunal to refer certain slightly different questions of law for the decision of this court but the Tribunal had declined to do so and hence these petitions.

3. The grievance of the assessed is in regard to the valuation of a property at 6, Friends Colony, New Delhi, for the assessment years above mentioned for purposes of wealth-tax. The Wealth-tax Officer had valued the property on the basis of a report by the valuation officer which in turn was based on the land and building method, rejecting the assessed's contention that the property should be valued on rental basis. The Appellate Assistant Commissioner, however, accepted the valuation of the property by the petitioner and directed the same to be adopted by the Wealth-tax Officer. Thereupon, the Commissioner of Wealth-tax preferred appeals to the Tribunal. The Tribunal, however, approved the valuation of the property by land and building method and in doing so adopted the value of the land at Rs. 120 sq. yd. The Tribunal also dismissed applications for rectification presented by the assessed alleging that there were certain discrepancies in the appellate order.

4. After hearing counsel for both the parties, we are of opinion that only one question of law arises out of the order of the Tribunal which is as follows :

"Whether, on the facts and in the circumstances of the case, the Tribunal was justified in upholding the valuation of the property by land and building method as against the rent yield method contended for by the assessed."

5. We direct the Tribunal to state a case and refer the above question of law for decision of this court.

6. As mentioned earlier, the assessed has raised as many as six questions. We, however, find that so far as the first question sought for by the assessed is concerned it does not arise out of the order of the Tribunal as the applicability of rule 1BB was neither raised by the assessed nor decided by the Tribunal. It is, however, contended on behalf of the assessed that the applicability of rule 1BB raised by this question is an aspect of the ground raised by the assessed that the rental value should be adopted. We express no opinion on this contention and leave it open to the assessed to urge, if permitted at the time of hearing of the reference, the issue whether the applicability of rule 1BB can be taken by the assessed as one of the arguments in support of the applicability of the rental basis in regard to the property in question. So far as the second question is concerned, we have directed its reference in a modified form. Question 3 raises only a question of fact and cannot be referred as a question of law. Question 4 does not raise any independent question apart from the valuation of the property on the rental basis and it does not call for separate reference. Question 5 as posed by the assessed is merely another form of the question (No. 2) which has already been directed to be referred. Question 6 again does not arise out of the order of the Tribunal as it does not appear that it was raised before or decided by the Tribunal.

7. In the result, we direct the Tribunal to state a case and refer the only one question of law set out above for the decision of this court. The Tribunal may make a consolidated statement of the case for all the three years in question. There will be no order as to costs.