Commissioner of Wealth Tax vs Gajsingh, Ex-Ruler of Jodhpur

Munishwar Nath Bhandari, J.—Learned Counsel for the petitioner Revenue urged that question as delineated at p. 9 of the paper book which reads as under required to be decided:

Whether on the facts and in the circumstances of the case the Tribunal is justified in law in directing to adopt the value of agricultural land and public park land as declared by the assessee when there is a provision in Sch. III to the WT Act to value such properties under Rule 20 of the said Schedule?

The question in its sum and substance says that valuation of the properties should be assessed in accordance with the Sch. III to the WT Act and value should be determined under Rule 20 of the WT Act. Rule 20 of the WT Act reads as under:

Valuation of assets in other cases--(1) The value of asset other than cash being an asset which is not covered by Rules 3 to 19 for the purposes of "this Act, shall be estimated to be the price which in the opinion of'' the AO, it Would fetch if sold in the open market on the valuation date.

(2) Notwithstanding anything contained in Sub-rule (1), where the valuation of any asset referred to in that sub-rule referred by the AO to the Valuation Officer u/s 16A, the value of such asset shall be estimated to be the price which, in the ''Opinion of the Valuation Officer, it Would fetch if sold in the open market on the valuation order.

(3) Where the value of any asset cannot be estimated under this rule because it is not saleable in the open market the value shall be determined in accordance with such guidelines or principles as may be specified by the Board from time to time by general or special order

Learned-counsel appearing for the Revenue urged that Rule 20(1), (2) is not applicable to the present case-as present case is covered by the Rule 20(3) of the Sch. III According to him, value, of properties should have been assessed by applying Rule 20 and not on the basis of value declared by the assessee. It was further submitted that when a statutory rule is available then authorities cannot pass order contrary. Hence it was prayed that the reference made by the Tribunal should be answered in their favour and thereby assessment of the valued property should be made as per r. 20 to the Sch. III.

Per contra, learned Counsel for the assessee submitted that the argument raised by the counsel for Revenue is without any basis, rather question has been referred by the Tribunal without going through the statutory provisions. Referring to Rule 20(3) it was submitted that the said provision can be applied only when some guidelines or principles have been specified: by the Board to determine the value of the properties involved in the present matter It was argued that Board has not issued any guidelines for determination of the value of the kind of properties involving in the present matter.; According to. the learned Counsel, Rule 20 is not applicable to the present case and in those circumstances even the reference is bad in eye of law and otherwise the answer to the reference has to be in negative thus it was prayed that the arguments of the Revenue should not be accepted for answering the reference.

In rejoinder learned Counsel for the Revenue submitted that there was a settlement between the parties to assess the value of land inasmuch as Settlement Commission had passed an order for determining the Value of property, however, ignoring the said settlement proceedings the value of properties was taken as was declared by the assessee. Reference needs to be answered in their favour.

We have considered the rival submissions of the parties and find that the limited question has been referred by the Tribunal for its answer. If the question raised in reference is taken note of it then it becomes clear that according to the Revenue, valuation of the ''property should be assessed by taking note of Sch. III of the WT Act and Rule 20 of the said Schedule. The bare reading of the Rule 20(3) shows, that it requires guidelines and principles to be specified by the Board for determination of the value of the properties. However as admitted by the counsel for the Revenue no such guidelines and principles have been issued thus in absence of guidelines and principles, determination of value of property cannot be made under r 20(3) of the Act, therefore, in our opinion, even very foundation to refer the question is not being led for its answer. In any case when no guidelines and'' principles have been specified/by the Board, the question referred has to be decided in negative that is against the Revenue. So far as other argument raised by the learned Counsel for the Revenue that value as assessed by the Settlement Commission should have been taken into consideration for determination of tax under the WT Act, we are not impressed by the argument of the learned Counsel for the reason that we. have to decide the question so referred to us for its answer and the perusal of question does not reveal that the Tribunal has referred any question for our determination as to whether value determination by the Settlement Commission has to be taken note of or not. In our view we cannot accept the question which otherwise has not been referred, therefore, we are not in agreement with the argument of the learned Counsel for the Revenue that value as determined by the Settlement Commission for the properties in question should have been taken into consideration that question is not before us, we cannot adjudicate the same. In view of the above discussion made, the reference made by the Tribunal is decided against the Revenue for the reason that I. 20(3) of the WT Act applies only when Board has specified guidelines and principles for the determination of value of the properties in question. As admittedly, no such guidelines and principles have been laid down, the reference has to be answered against the Revenue.:

Accordingly, we decide the reference on the following terms:

In absence of guidelines and principles specified by the Board by a general or special order in regard to the properties in question, Tribunal was justified to adopt the value of agricultural land and public park as declared by the assessee.

The reference is accordingly answered.