S. Arjun Singh vs Commissioner Of Wealth-Tax
1988 Latest Caselaw 69 Del

JUDGMENT

1. These are nine application by the assessed under section 27(3) of the wealth-tax Act, 1957, and pertain to the assessment years 1963-64, 1964-65 and 1966-67 to 1972-73. In these application, the assessed has asked for the following three questions to be referred :

"1. Whether, on the facts and in the circumstances of the case, the Tribunal erred in law in holding that the valuation of the property computed in accordance with the direction of the Tribunal be not less than that returned by the assessed itself ?

2. Whether, on the facts and in the circumstances of the the case, the Income-tax Appellate Tribunal erred in law in holding that the principles laid down by the Supreme Court in the case of Dewan Daulat Rai Kapoor v. New Delhi Municipal Committee [1980] 122 ITR 700 were not relevant for the purpose of determination of valuation of the property under rule 1 BB of the Wealth-tax Rules, 1957 ?

3. Whether, on the facts and in the circumstances of the case, the Tribunal erred in law in holding that the factors that the property fronted on the service lane and not on the main road, that it was fully developed plot on which no further construction would be allowed or was allowed, and part of the property was situated in an area which had been earmarked for high rise public sector buildings were not relevant for determining the valuation of the property ?"

2. However, at the time of the argument, Mr. Harnam Shankar stated that he was pressing only question No. 1 as question No. 2 is already covered by the question referred by the Tribunal as per its order dated January 23, 1981. He conceded that question No. 3 was a question of fact and need not be referred.

3. The dispute in the case relates to valuation of 20A, Aurangzeb Road, New Delhi. The assessed had indicated a certain value in the return. The Wealth-tax Officer referred the matter to a valuer and accepted the value determined by the Valuation Officer. The assessed appealed to the Appellate Assistant Commissioner that the Valuation Officer had, inter alia. not deducted 50 per cent. of the unearned increase to be paid to the Land and Development Officer on transfer, in arriving at the valuation. The Appellate Assistant Commissioner rejected the contention but the Tribunal held that after 1951, this payment became obligatory and the said amount has to be allowed as a deduction in arriving at the valuation of the property in the light of the principles laid down by the Supreme Court in CWT v. Sikand (P. N.) [1977] 107 ITR 922. Consequently, the Tribunal directed the Wealth-tax Officer "to recompute the value of the property in different years in the light of the above directions" but indicated that the recomputed value will not be less than that returned by the assessed in those years.

4. The assessed moved the Income-tax Appellate Tribunal under section 27(1) of the Wealth-tax Act to refer, inter alia, the abovementioned question No. 1. The Tribunal did not refer the said question as it felt that the answer would be self-evident.

5. It is apparent that question No. 1 is a question of law and does arise out of the order of the Tribunal. We do not think that the answer is self-evident as, in certain circumstances, a valuation lower than that returned may be the correct value. An admission is an important piece of evidence, but it is not conclusive and it is open to the assessed to show that it is incorrect. (See : Pullangode Rubber Produce Co. Ltd. v. State of Kerala ).

6. Mr. Harnam Shankar has referred to the case of G. N. Dalmia v. CWT [1986] 161 ITR 688, wherein this court has referred a similar question, i.e., "Whether the Tribunal is right in holding as implicit that what is shown by the assessed in the wealth-tax returns will be accepted by the Wealth-tax Officer, if it is higher than the valuation of the property arrived at by the application of rule 1 BB of the Wealth-tax Rules."

7. The basic question is if the value as calculated under rule 1 BB is less than the value shown in the return, can the assessed get the benefit of this lower value ? We feel that this is a question which needs determination and should be referred, as otherwise, recomputation of the value of the property on the principles of P. N. Sikand's case will not be fully carried out.

8. We, therefore, direct the Tribunal to draw up a statement of the case and refer question No. 1 as abovementioned for the opinion of this court. The statement of case should be a consolidated statement for all the years in question.

9. The applications are disposed of accordingly.