TaxTMI 
TaxTMI 
1999 (3) TMI 119
X X X X Extracts X X X X
X X X X Extracts X X X X
....ning the following fair market value of the above said property: Valuation date Asst. yr. FMV as per Departmental valuer Rs. 31-3-1988 1988-89 2,04,26,600 31-3-1989 1989-90 2,76,62,300 31-3-1990 1990-91 3,48,42,100 While these assessments were pending, the AO issued notice under s. 17 for the asst. yrs. 1988-89 and 1989-90 and in respect thereto assessee filed second return for asst. yrs. 1988-89 and 1989-90 on 1st June, 1992, showing ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ment merely on the basis that the AO has not followed the valuation as has been worked out by the Valuation Officer under s. 16A of the WT Act, and that the assessment orders were not erroneous. The AO has taken the value of the property at No 4. Radhakrishnan Salai, at Rs. 63,87,325 for each of the assessment years by applying r. 1BB/Sch. III of the WT Act. He drew our attention towards s. 7(1) of the WT Act which speaks that the value of an asset other than cash for the purpose of the Act shall give the value as determined in the manner laid down in Sch. III of the WT Act. He further submitted that the AO applied rr. 3 and 4 of Sch. II. I while framing the assessment and has not invoked r. 8 and, therefore, the order passed by the WTO was in accordance with law. Even the Valuation Officer does not have any power to reject r. 3. Rule 20 of Sch. III will be applied only in case r. 8 is applicable. None of the sub-clauses of r. 8 were applicable in the case of the assessee. The power given under r. 8(a) to the AO can be exercised only with the previous approval of the Dy. CIT. The assessee is 84 years of age and there is a nursing home running in the building. The rental income from....
X X X X Extracts X X X X
X X X X Extracts X X X X
....itions are concerned there is no doubt that these two conditions have been duly complied with. The dispute is with regard to the compliance of the third condition i.e., whether the order passed by the AO can be regarded to be erroneous on the basis of law. The CWT in his order dt. 29th Nov., 1994 in para 3 has stated as under: "As this report was available with the AO before passing of the wealth-tax assessment orders, the adoption of lower fair market value of the said property was considered erroneous and hence prejudicial to the interests of Revenue. XX XX XX" which clearly denotes that the CWT has taken it to be an error committed by the AO as he had not taken the value of the property at No. 4 Radhakrishnan Salai as has been estimated by the Departmental valuer. 'Erroneous' means erring or wrong or full of error. The error may be of a fact or law. From paras 9, 10, 11 of the order of the CWT, it is apparently clear that according to him the AO was bound under s. 16A r/w r. 20(2) of WT Rules to complete the assessment in accordance with the value as h....
X X X X Extracts X X X X
X X X X Extracts X X X X
....immovable property be it a building or land appurtenant thereto. In the case of the assessee, the assets in question is building and land appurtenant thereto. The AO has worked out the value by applying rr. 3 to 7 of Sch. III. There is no dispute on this fact. Rule 8 lays down three criterias under which r. 3 will not apply. The first criteria laid down is that if the AO is of the opinion that it is not practicable to apply r. 3, the AO is empowered not to apply r. 3, but for this, he has to get the previous approval of the Dy. CWT. In the case of the assessee the learned Departmental Representative could not place any material to prove that the AO has exercised his jurisdiction under r. 8(a) of Sch. III with the previous approval of the Dy. CWT. No such case has been brought on record. The second criteria relates where the difference between the unbuilt area and the specified area exceeds twenty per cent of the aggregate area. The third criteria relates to where the property is constructed on leasehold land and the lease is about to expire within a period not exceeding 15 years from the date of the relevant valuation date and under the terms of the lease deed, no option is given t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ecords or other documents as the Valuation Officer may require. (3) Where the Valuation Officer is of opinion that the value of asset has been correctly declared in the return made by the assessee under s. 14 or s. 15, he shall pass an order in writing to that effect and send a copy of his order to the AO and to the assessee. (4) Where the Valuation Officer is of opinion that the value of the asset is higher than the value declared in the return made by the assessee under s. 14 or s. 15, or where the asset is not disclosed or the value of the asset s not declared in such return or where no such return has been made, the Valuation Officer shall serve a notice on the assessee intimating the value which he proposes to estimate and giving the assessee an opportunity to state, on a date to be specified in the notice, his objections either in person or in writing before the Valuation Officer and to produce or cause to be produced on that date such evidence as the assessee may rely in support of his objections. (5) On the date specified in the notice under sub-s. (4) or as soon thereafter as may be, after hearing such evidence as the assessee may produce and after considering suc....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... situated at No. 4 Radhakrishnan Salai has to be worked out in accordance with Sch. III and he accordingly worked out the value in the manner laid down under rr. 3 to 7 of the said Schedule. In the pith and substance of the case, we are of the considered opinion that no error of law has been committed by the AO while completing the assessment totally disregarding the Departmental valuation report even though a reference has been made to the Valuation Officer by the AO under s. 16A of the WT Act. Sec. 16A r/w r. 20(2) of Sch. III does not give blanket power to the Valuation Officer that its report will be binding on the AO even if the reference made by the AO is not in accordance with law or is illegal in the eyes of law. 7. We have gone through the case laws relied on by the authorised representative of the assessee. But we find that these cases are not applicable to the facts of the assessee. The three cases relied on by the authorised representative: (i) Onkarji Kasturchand (HUF) vs. WTO; (ii) Satyendra Chunder Ghose vs. WTO & Ors., and (iii) Smt. Uma Debi Jhawar vs. WTO & Ors. holds only that reference to the Valuation Officer can be made when the proceedings befo....