Wealth-tax valuation rule 1BB was not mandatory for residential property, following the same reasoning as rule 1D.

Rule 1BB of the Wealth-tax Rules, 1957 was held not to operate as a mandatory valuation provision for the assessment years 1970-71 to 1975-76. The court examined the valuation scheme under section 7 of the Wealth-tax Act, 1957 and the scope of the rule-making power under section 46, and applied the Full Bench reasoning that rule 1D was not compulsory. On that basis, the same principle was extended to rule 1BB, so residential property value could not be said to be compulsorily governed by that rule in the manner urged. The reference was answered in the negative and the Tribunal's view of mandatory application was rejected.

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Issues: Whether, for the assessment years 1970-71 to 1975-76, the value of the assessee's residential property was required to be determined on the basis of rule 1BB of the Wealth-tax Rules, 1957 as a mandatory rule.

Analysis: The answer turned on the scheme of valuation under section 7 of the Wealth-tax Act, 1957 and the extent of the rule-making power under section 46 of that Act. The Court applied the Full Bench ruling that rule 1D of the Wealth-tax Rules, 1957 was not mandatory, and held that the same reasoning governed rule 1BB. On that basis, rule 1BB could not be treated as compulsorily governing valuation in the manner contended.

Conclusion: The reference was answered in the negative and the Tribunal's view that rule 1BB was mandatory was rejected.

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