Commissioner of Wealth Tax v. Smt. Shakuntla Mehra

Case Laws Analysis
Applied on Malabar Industrial Co. Ltd. v. CIT 2000 TaxPub(DT) 1227 (SC)

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The Tax PublishersAppeal No. 2 of 1981, 1 of 1981, 3 of 1981 2000 TaxPub(DT) 1508 (Del-Trib) : (2000) 246 ITR 0501 : (2000) 164 CTR 0043 : (2001) 114 TAXMAN 0065 Commissioner of Wealth Tax v. Smt. Shakuntla Mehra () WEALTH TAX --Revision----ERRONEOUS AND PREJUDICIAL ORDERAssessing officer accepted valuation of property as done by registered valuer-- Catch Note: Assessee and her two son had 1/6th share each in properties situated at Delhi-- Assessing officer accepted valuation of property done by registered valuer--Registered valuer valued properties on average of land and construction method and rental method--Following Apex Court's judgment in State of Kerala v. P.P. Hassan Kaya AIR 1968 Supreme Court 1201, Commissioner opined that valuation should have been done on basis of rental income only--Commissioner set aside order of assessing officer holding same as erroneous and prejudicial to revenue--Tribunal set aside Commissioner's order holding that he had not objected to method of valuation and only multiple to be adopted in respect of rental method was objected to--Not justified--In his order, Commissioner clearly indicated that in view of Apex Court's judgment in State of Kerala v. P.P. Hassan Kaya AIR 1968 SC 1201 property should have been valued following rental income method, hence, Commissioner's order could not be set aside. Held: Tribunal has proceeded on erroneous presumptions to hold that the Commissioner had not objected to the land and construction valuation method, and only the multiple to be adopted in respect of the rental method was objected to. In fact show cause notice in each case issued to the assessee contained a reference to a decision of the Apex Court in State of Kerala v. P.P. Hassan Koya AIR 1968 SC 1201, and it was indicated that Wealth Tax Officer should have valued the properties on the basis of rental income only and not on the basis of average of two, i.e., cost of construction and rental method. In the orders passed by the Commissioner also it was clearly held that in the view of the aforesaid decision of the Apex Court Wealth Tax Officer should have valued property on the basis of rental income only and not on the basis of average of the two. To that extent Tribunal's conclusions were erroneous. Additionally, on the factual position highlighted above, the Wealth Tax Officer's conclusion, relying on the registered valuer report which proceeded on the basis of average between two methods, is unsustainable. That being the position Tribunal was not justified in setting aside Commissioner's order passed under section 25(2) of the Act. [Para 4] Application: Also to current assessment year. Decision: In favour of revenue Date of Judgment: 11 August 2000 Cases Referred: Malabar Industries Co. Ltd. v. CIT (2000) 243 ITR 83 (SC) and State of Kerala v. P.P. Hassan Kaya AIR 1968 SC 1201. SUBSCRIBE FOR FULL CONTENT

The Tax PublishersAppeal No. 2 of 1981, 1 of 1981, 3 of 1981
2000 TaxPub(DT) 1508 (Del-Trib) : (2000) 246 ITR 0501 : (2000) 164 CTR 0043 : (2001) 114 TAXMAN 0065

Commissioner of Wealth Tax v. Smt. Shakuntla Mehra ()

WEALTH TAX

--Revision----ERRONEOUS AND PREJUDICIAL ORDERAssessing officer accepted valuation of property as done by registered valuer--

Catch Note:

Assessee and her two son had 1/6th share each in properties situated at Delhi-- Assessing officer accepted valuation of property done by registered valuer--Registered valuer valued properties on average of land and construction method and rental method--Following Apex Court's judgment in State of Kerala v. P.P. Hassan Kaya AIR 1968 Supreme Court 1201, Commissioner opined that valuation should have been done on basis of rental income only--Commissioner set aside order of assessing officer holding same as erroneous and prejudicial to revenue--Tribunal set aside Commissioner's order holding that he had not objected to method of valuation and only multiple to be adopted in respect of rental method was objected to--Not justified--In his order, Commissioner clearly indicated that in view of Apex Court's judgment in State of Kerala v. P.P. Hassan Kaya AIR 1968 SC 1201 property should have been valued following rental income method, hence, Commissioner's order could not be set aside.

Held:

Tribunal has proceeded on erroneous presumptions to hold that the Commissioner had not objected to the land and construction valuation method, and only the multiple to be adopted in respect of the rental method was objected to. In fact show cause notice in each case issued to the assessee contained a reference to a decision of the Apex Court in State of Kerala v. P.P. Hassan Koya AIR 1968 SC 1201, and it was indicated that Wealth Tax Officer should have valued the properties on the basis of rental income only and not on the basis of average of two, i.e., cost of construction and rental method. In the orders passed by the Commissioner also it was clearly held that in the view of the aforesaid decision of the Apex Court Wealth Tax Officer should have valued property on the basis of rental income only and not on the basis of average of the two. To that extent Tribunal's conclusions were erroneous. Additionally, on the factual position highlighted above, the Wealth Tax Officer's conclusion, relying on the registered valuer report which proceeded on the basis of average between two methods, is unsustainable. That being the position Tribunal was not justified in setting aside Commissioner's order passed under section 25(2) of the Act. [Para 4]

Application:

Also to current assessment year.

Decision:

In favour of revenue

Date of Judgment:

11 August 2000

Cases Referred:

Malabar Industries Co. Ltd. v. CIT (2000) 243 ITR 83 (SC) and State of Kerala v. P.P. Hassan Kaya AIR 1968 SC 1201.