TaxTMI 
TaxTMI 
2009 (7) TMI 838
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....unal") in W. T. A. No. 30/Chd/2005 for the assessment year 1998-99. The Revenue has claimed that the following substantive question of law would arise for determination of this court : "Whether on the facts and circumstances of the case, the Income-tax Appellate Tribunal was justified in law 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 by ignoring the provisions of sub-section (6) of section 16 of the Wealth-tax Act, 1957, as per which the report of the Valuation Officer is binding on the Assessing Officer ?" 2. The brief facts of the case are that the assessee-respondent filed its return of wealth for ....
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....ribunal set aside the order dated June 1, 2005 (A.2) of the Commissioner of Income-tax (Appeals), Ludhiana by holding as under : "3. Now, the assessee is in appeal. We have heard both parties and carefully gone through the material on record. In the instant case, it seems that the Assessing Officer while adopting the value estimated by the DVO had not given any opportunity to the assessee for rebuttal. Nothing is mentioned in the assessment order of the Assessing Officer, how the value was determined by the DVO. He simply replaced the value declared by the assessee by the value determined by the DVO. The learned Commissioner of Income-tax (Appeals) has also not given any cogent reason while confirming the addition made by the Assessing O....
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....fficer. He has placed reliance on sub-section (6) of section 16A of the Act and argued that there is no option given to the Assessing Officer who is required to complete the assessment in conformity with the estimation of the Valuation Officer. Learned counsel for the Revenue has emphasized that the use of the word "shall" in that section makes it mandatory on the part of the Assessing Officer to proceed in accordance with the report of the Valuation Officer. In order to buttress his stand, learned counsel has placed reliance on a Division Bench judgment of the Allahabad High Court in the case of M. C. Khunnah v. Union of India [1979] 118 ITR 414 and submitted that the Wealth-tax Officer is bound to accept the valuation given by the Valuati....
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....ing Officer is of opinion that the value so returned is less than its fair market value ; (b) in any other case, if the Assessing Officer is of opinion- (i) that the fair market value of the asset exceeds the value of the asset as returned by more than such percentage of the value of the asset as returned or by more than such amount as may be prescribed in this behalf ; or (ii) that having regard to the nature of the asset and other relevant circumstances, it is necessary so to do. (2) For the purpose of estimating the value of any asset in pursuance of a reference under sub-section (1), the Valuation Officer may serve on the assessee a notice requiring him to produce or cause to be produced on a date specified in the notice suc....
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....opy of his order to the Assessing Officer and to the assessee. (6) On receipt of the order under sub-section (3) or sub-section (5) from the Valuation Officer, the Assessing Officer shall, so far as the valuation of the asset in question is concerned, proceed to complete the assessment in conformity with the estimate of the Valuation Officer. " 6. A perusal of the aforesaid provision makes it evident that in a case where the market value of the assets is to be taken into account in an assessment, the Assessing Officer may refer the valuation of any asset to a Valuation Officer. On a reference having been made, the Valuation Officer is required to serve the assessee notice requiring him to produce on a specified date such accounts, rec....
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....Court in the cases of M. C. Khunnah [1979] 118 ITR 414 and Dr. H. Rahman [1991] 189 ITR 307. In paragraph 6 of M. C. Khunnah's case [1979] 118 ITR 414 (All), the following views have been expressed (page 418) : "The only other contention raised in support of this petition was that the Wealth-tax Officer had acted illegally and in disregard of the principles of natural justice in not affording the petitioner an opportunity of cross-examining the Valuation Officer. As already stated under sub-section (6) of section 16A, the Wealth-tax Officer has no option but to pass an order in conformity with the valuation report submitted by the Valuation Officer. Assuming that in cross-examination the petitioner could have succeeded in est....