2009 (7) TMI 838 - HC - Wealth-tax

Assessing Officer must follow Valuation Officer's estimate under Wealth-tax Act, High Court decision favors Revenue

The High Court Punjab and Haryana held that the Assessing Officer must adhere to the Valuation Officer's estimate as per the Wealth-tax Act. The Court set ... Reference to valuation officer - Scrutiny - The explanation was not accepted by the Assessing Officer and the matter was referred to the Departmental Valuation Officer, Income-tax Department who determined the value of the plot at Rs. 1,76,33,330 - During the course of hearing, it was also one of the contentions of the learned counsel for the assessee that the case of Sh. Sanjay Jain which had been considered by the Assessing Officer was a subject-matter of appeal before the Income-tax Appellate Tribunal, Chandigarh Bench wherein vide order dated May 24, 2005, the value had been adopted at Rs. 2,900 per sq. yd. for the adjoining plot It is in the context of the aforesaid provision that the question of law has to be answered in favour of the Revenue because one comprehensive provision has been made by sub-sections (3) to (5) and the principles of audi alteram partem have been set out to be followed by the Valuation Officer then no further opportunity before the Assessing Officer needs to be given as it would result into duplication - The aforesaid view has further been followed and applied in Dr. H. Rahman's case [1991] 189 ITR 307 (All) - Decided in the favour of the assessee The High Court Punjab and Haryana High Court Citation: 2009 (7) TMI 838 - Punjab and Haryana High Court judgment was delivered by Kumar M. M., Jaswant Singh JJ. The appeal was filed by the Revenue under section 27A of the Wealth-tax Act, 1957 against an order passed by the Income-tax Appellate Tribunal, Chandigarh Bench 'A' Chandigarh for the assessment year 1998-99. The substantive question of law was whether the Tribunal was justified in directing the Assessing Officer to confront the report of the Valuation Officer to the assessee-company and to consider its order of lower valuation in the case of Sanjay Jain, despite the provisions of sub-section (6) of section 16 of the Wealth-tax Act, 1957.The brief facts of the case revealed that the Assessing Officer had questioned the value of a plot at Pakhowal Road, Ludhiana, leading to a dispute over valuation. The Commissioner of Income-tax (Appeals) upheld the addition made by the Assessing Officer, prompting the assessee to appeal to the Tribunal. The Tribunal found that the Assessing Officer had not given the assessee an opportunity to rebut the valuation by the Departmental Valuation Officer, and directed the case back to the Assessing Officer for further consideration.The Revenue argued that the Assessing Officer was obligated to proceed with the valuation of the asset as determined by the Valuation Officer, as per the Wealth-tax Act. The counsel for the assessee agreed with this proposition and suggested the matter be remitted back to the Tribunal for a decision on the merits.The Court examined section 16A of the Wealth-tax Act, which outlines the procedure for valuation of assets by a Valuation Officer. The Court found that the Valuation Officer's estimate should be followed by the Assessing Officer, as per the law. The Court cited Division Bench judgments of the Allahabad High Court to support this interpretation.Consequently, the question of law was answered in favor of the Revenue, and the Tribunal's order was set aside. The Tribunal was directed to decide the appeal on its merits, taking into account the Court's interpretation of the law. The parties were instructed to appear before the Tribunal on a specified date.In summary, the judgment revolved around the dispute over valuation of a plot and the legal obligations of the Assessing Officer to follow the Valuation Officer's estimate. The Court's decision favored the Revenue and required further consideration by the Tribunal based on the legal interpretation provided.