2002 (1) TMI 33 - HC - Income Tax

Court Orders Strict Adherence to Gift-tax Act Valuation Rules

The court directed that the property be valued in accordance with the rules outlined in Schedule II of the Gift-tax Act, emphasizing strict adherence to ... - Issues: Challenge to valuation under Gift-tax Act, 1958Analysis:The petitioner challenged the valuation made by the respondents under the provisions of the Gift-tax Act, 1958. The valuation of a property owned by the petitioner was conducted by the second respondent after issuing a show-cause notice. The petitioner submitted gift-tax returns for the year 1975-76, including the valuation of his share of the property. The Valuation Officer assessed the property at a certain value, which the petitioner objected to, citing pending assessments for previous years. The assessment was made based on an earlier order under the Wealth-tax Act, 1957, which the petitioner disputed. The Gift-tax Act, 1958, specifies the method for determining the value of gifted property, requiring adherence to Schedule II appended to the Act.The court emphasized that the valuation of the property subject to gift must be done in accordance with the rules laid down in Schedule II of the Gift-tax Act. These rules, being procedural in nature, are akin to rules of evidence and must be strictly followed. The respondents failed to value the property as per these rules, leading to a deviation from the prescribed valuation method. In the interest of justice, the court directed that the property in question be valued in accordance with the rules outlined in Schedule II of the Gift-tax Act.In conclusion, the court disposed of the writ petition with the directive to value the property as per the rules specified in Schedule II of the Gift-tax Act. The judgment did not award costs to any party involved, considering the circumstances of the case.