Wealth-tax valuation must follow the Valuation Officer reference mechanism before rejecting the assessee's declared property value.

Under section 7(1) of the Wealth-tax Act, 1957, the Assessing Officer could not estimate the market value of property above the value declared by the assessee without first making a reference to the Valuation Officer under section 16A. The Delhi High Court followed its earlier ruling on the same interaction between valuation powers and the reference mechanism, and held that the impugned course was not justified. The further question was treated as merely consequential and did not require separate adjudication.

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Issues: Whether, on the facts and in the circumstances of the case, the Wealth-tax Officer was justified in estimating the market value of the property in excess of the value declared by the assessee without making a reference to the Valuation Officer.

Analysis: The controversy turned on the interaction between the valuation power under section 7(1) of the Wealth-tax Act, 1957 and the reference mechanism under section 16A. The Court followed its earlier decision holding that, in view of section 16A, the Assessing Officer could not adopt the impugned course without reference to the Valuation Officer. The second question was treated as merely consequential and did not require separate adjudication.

Conclusion: The question was answered in the affirmative in favour of the assessee and against the Revenue. The reference was disposed of accordingly.

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