Smt. Parvatibai K. Tiwari vs Commissioner of Income Tax

Bharucha J.

This is a reference under the Wealth-tax Act, 1957, made at the instance of the assessee. It raises the following questions :

"Whether, on the facts and in the circumstances of the case, it was rightly held that the assessee cannot be allowed to rely on the valuation report at the time of hearing before the Tribunal and that the valuation of the properties taken at Rs. 8,00,000 for the assessment years 1957-58 to 1959-60 was correct ?"

The relevant assessment years are 1957-58 to 1959-60. The assessee did not file wealth-tax returns for the above three years. The Wealth-tax Officer issued notices to her u/s 17. Thereupon, she filed returns and disclosed net wealth for the three years thus :

The Wealth-tax Officer was constrained to make best judgment assessments because the assessee did not comply with the notices issued u/s 16. He estimated the assessee''s net wealth for each of the three years at Rs. 13,00,000. The assessee appealed to the Appellate Assistant Commissioner,. The Appellate Assistant Commissioner confirmed the valuation made by the Wealth-tax Officer of immovable property at Rs. 10,20,000 but reduced the valuation of movable property to Rs. 1,80,000.

The assessee then appealed to the Income Tax Appellate Tribunal. Pending disposal of the appeal, notices were addressed to the assessee stating that she was entitled to refer the question of valuation of the immovable property to valuers and was called upon to nominate her valuer if she intended that a reference should be made. The assessee appointed her valuer. The Department appointed its valuer. The valuers thereafter submitted a valuation report valuing the assessee''s share in the immovable properties at Rs. 3,21,000. The assessee relied upon this valuation report and submitted that the immovable property could not be valued at more than the aforesaid figure. The Department objected. The Tribunal stated that when the assessee herself has shown the valuation of the immovable property to be Rs. 8,00,000 "there was nothing wrong in accepting the same." It took the valuation of the immovable property to be Rs. 8,00,000. The question posed to us arises out of this finding.

The relevant provision being section 24(6)(a) of the Wealth-tax Act, as it then read was thus :

"Where the appellant objects to the valuation of any property, the Appellate Tribunal may, and if the appellant so requires, shall, refer the question of the disputed value to the arbitration of two valuers, one of whom shall be nominated by the appellant and the other by the respondent, and the Tribunal shall, so far as that question is concerned, pass its orders under sub-section (5) conformable to the decision of the valuers."

It will be seen that what is required to be referred is "the question of the disputed value". The question of the disputed value here was whether the valuation of the immovable property should be Rs. 10,20,000 as the Wealth-tax Officer and the Appellate Assistant Commissioner had determined it or Rs. 8,00,000 as the assessee had shown it. Whatever the valuation report, therefore, the valuation could not have been taken to be less than the figure of Rs. 8,00,000 at which the assessee had herself valued the immovable property. The Tribunal was, therefore, not in error when it said, "when the assessee herself shows the valuation at Rs. 8,00,000, there is nothing wrong in accepting the same."

Accordingly, the question is answered thus : The valuation of the immovable properties taken at Rs. 8,00,000 for the assessment years 1957-58 to 1959-60 was correct.

No order as to costs.