Registered valuation and statutory reference procedure controlled gift-tax valuation of plots transferred to a partnership firm.

A transfer of plots to a partnership firm was examined for gift-tax implications, but the disclosed value supported by a registered valuer's report was accepted because the Gift-tax Officer did not follow the statutory procedure for disputing that valuation. Where dissatisfied, the officer was required under section 15(6) to make a proper reference to the Valuation Officer and comply with the prescribed process; reliance on an earlier wealth-tax valuation and non-observance of Board instructions was insufficient. The higher valuation was therefore rejected, the plots were to be valued at Rs. 82,000, and no deemed gift arose from inadequate consideration.

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Issues: Whether the assessee's transfer of plots to a partnership firm amounted to a taxable gift, and whether the valuation adopted by the Gift-tax Officer could stand in the face of the registered valuer's report and the statutory procedure for reference to a Valuation Officer.

Analysis: The return value of the plots was supported by a registered valuer's estimate. The statutory scheme under section 15(6) required the Gift-tax Officer, where he was dissatisfied with such value, to make a proper reference to the Valuation Officer and follow the prescribed procedure. The valuation relied upon by the revenue was taken from wealth-tax proceedings conducted at an earlier stage and could not be substituted for compliance with the Gift-tax Act procedure. The officer also did not follow the Board's instructions governing such references. In these circumstances, the assessee's disclosed value was accepted and the higher valuation was rejected.

Conclusion: The plots had to be valued at Rs. 82,000, the provisions dealing with deemed gift on inadequate consideration were not attracted, and no gift chargeable to gift-tax arose from the transaction.

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