1990 (8) TMI 219 - AT - Wealth-tax

Tribunal Upholds Revaluation Decision, Rule 1BB Applies to All Assessees

The Tribunal upheld the Commissioner of Wealth Tax (Appeals)'s decision to revalue the property based on rule 1BB of the Wealth Tax Rules, rejecting the ... - Issues:Valuation of property under rule 1BB of the WT Rules.Applicability of rule 1BB and s. 40 of the Finance Act, 1983 to the assessment of a company.Interpretation of s. 40(4) of the Finance Act, 1983 in relation to valuation of assets.Judicial discretion in directing the filing of an appeal to the Appellate Tribunal.Analysis:The appeals by the Revenue contested the valuation of a property belonging to the assessee under rule 1BB of the Wealth Tax (WT) Rules. The Assessing Officer initially assessed the property at a higher value than declared by the assessee, citing the exclusion of rule 1BB due to the difference between the unbuilt and built-up area exceeding 20%. However, the Commissioner of Wealth Tax (Appeals) found that the difference was within permissible limits and directed a revaluation based on rule 1BB, disregarding the Revenue's argument that s. 40 of the Finance Act, 1983 excluded the application of rule 1BB. The Revenue's appeal contended for restoring the Valuation Officer's determined value, but failed to dispute the factual finding regarding the difference in built-up area. The crux of the issue was whether s. 40 of the Finance Act, 1983 excluded rule 1BB, with the assessee arguing for the rule's application based on legislative provisions and precedents.The Tribunal analyzed the legislative framework, particularly s. 40 of the Finance Act, 1983, which revived the levy of Wealth Tax on companies. The Tribunal emphasized that the provisions of the Wealth Tax Act were applicable to the assessment of companies following the revival by s. 40. The interpretation of s. 40(4) in conjunction with s. 7(1) of the Wealth Tax Act was crucial in determining the valuation methodology for assets. The Tribunal highlighted that the exclusion of certain sections under s. 40(5) did not extend to s. 7(1) or the rules made thereunder, indicating the enforceability of these provisions in asset valuation.In citing judicial precedents, the Tribunal underscored the purpose of rule 1BB to provide a uniform valuation method, emphasizing its application to all assessees, including companies. The Tribunal referenced a case where the Valuation Officer was obligated to adhere to rule 1BB when valuing assets, reinforcing the rule's mandatory nature. The Tribunal rejected the Revenue's argument against applying rule 1BB to companies, emphasizing the need for consistency in valuation practices across different types of assessees.Regarding judicial discretion in directing appeals to the Appellate Tribunal, the Tribunal scrutinized the Commissioner's decision to appeal, noting the requirement for impartiality and reasonableness in exercising such discretion. The Tribunal found the Commissioner's direction to appeal in the present case discriminatory and untenable, given the established applicability of rule 1BB to companies and the Commissioner's acknowledgment of relevant precedents and circulars. Consequently, the Tribunal dismissed the Revenue's appeal, refusing to entertain it based on the discriminatory nature of the direction to file the appeal.