Judgment :- ABDUL HADI, J. In this tax case preferred by the Revenue, relating to the assessment year 1974-75, the questions referred to us, under section 26 of the Gift-tax Act, 1958 (hereinafter referred to as "the Act"), are as follows: "1. Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was justified in holding that the value of the property should be determined on rental basis applying rule 1BB of the Wealth-tax Rules, 1957 ? 2. Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was justified, while setting aside the assessment for being redone by the Commissioner of Gift-tax (Appeals) in directing him to determine the value of the property gifted on rental basis ?" * The short facts are as follows : One S. M. A. Syed Abdul Cader, transferred by way of gift, the house property at No. 32, Nungambakkam High Road, Madras, to his two grand nephews on February 1, 1974. The return of gift was filed, declaring the value of the gift at Rs. 1, 25, 000. The Gift-tax Officer, however, took the value of the Assistant Valuation Officer, to whom the matter was referred, under section 15(6) of the Act for determining the value of the property in question. The Assistant Valuation Officer, while arriving at the value of the property at Rs. 3, 25, 700, took into consideration the area of the plot on which the property is situated and also depreciated the value of the superstructure thereon. Aggrieved by the valuation made by the Gift-tax Officer, the assessee went on appeal before the Commissioner of Gift-tax (Appeals) who directed the Gift-tax Officer to reduce the value to Rs. 2, 25, 000 and also to allow the deduction towards stamp duty paid in accordance with law. Both the assessee and the Department, aggrieved by the order of the Commissioner of Gift-tax (Appeals), preferred separate appeals to the Tribunal. The Tribunal held that in the case of the above-said property, which was let out, the rental method should be adopted for valuation. Both the assessee and the Department, aggrieved by the order of the Commissioner of Gift-tax (Appeals), preferred separate appeals to the Tribunal. The Tribunal held that in the case of the above-said property, which was let out, the rental method should be adopted for valuation. It also noted the argument on behalf of the assessee before it, that pursuant to rule 1BB of the Wealth-tax Rules, 1957, which (the said rule 1BB) came into force from April 1, 1979, and was in force till March 31, 1989, the value of the property should not be more than Rs. 1, 81, 020 and concluded thus: "We are in agreement with the learned representative for the assessee that in the case of let out properties the rental method should be adopted for the valuation. We have already extracted above the valuation made by the assessee at Rs. 1, 81, 020 on this basis. The assessee has already taken into consideration the area of the land appurtenant to the house (1, 480.62 sq. ms. out of the total area of 1, 864 sq.ms.) which may have further potential for development. In view of the above, we are of the opinion that the matter should be sent back to the Commissioner of Gift-tax (Appeals) for determining the value on rental basis. He will be at liberty to ascertain fresh value of the property on rental basis through the Departmental valuer and confront the same to the assessee before taking a decision afresh." * As already mentioned, the said rule 1BB of the Wealth-tax Rules, came into force only from April 1, 1979, that is very much after the assessment year in question 1974-75 and was in force till March 31, 1989. The gift in question has no doubt to be valued as per section 6 of the Act, as it existed in the said assessment year. Then, the material portion ran as follows: ". . . the value of any property . . . The gift in question has no doubt to be valued as per section 6 of the Act, as it existed in the said assessment year. Then, the material portion ran as follows: ". . . the value of any property . . . be estimated to be the price which in the opinion of the Assessing Officer, it would fetch if sold in the open market on the date on which the gift was made." Then, the rule which prescribed the mode of valuation of properties, viz., rule 10 of the Gift-tax Rules, 1958, as it existed in the said assessment year, did not provide for properties let out and saleable in the open market, though on and after April 1, 1989, according to the relevant portion of section 6 of the Gift-tax Act, 1958, with reference to the property in question its value "shall be determined in the manner laid down in Schedule II," to the Gift-tax Act, 1958, which Schedule II in turn, says that the said value "shall be determined in accordance with the provisions of Schedule III to the Wealth-tax Act . . . ." (emphasis supplied)In other words, prior to April 1, 1989, there is no nexus or link between the Gift-tax Act or the Rules, on the one hand, and the Wealth-tax Act or the Rules, on the other hand, which could be made use of in making the assessment under the Gift-tax Act Then in the Gift-tax Act, while section 6 provides for determination of value of gift, section 15(6) of the said Act, as it existed on and after January 1, 1973, and before April 1, 1989, provided thus: "Notwithstanding anything contained in section 6, for the purpose of making an assessment under this Act, the Assessing Officer may refer to a Valuation Officer, the valuation of any property transferred by way of gift-- (a) in a case where the value of the property as returned is in accordance with the estimate made by a registered valuer, if the Assessing 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 property exceeds the value of the property as returned by more than such percentage of the value of the property 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 property and other relevant circumstances, it is necessary so to do . . . ." So, according to learned senior counsel for the Revenue, since in the present case, pursuant to section 15(6) reference has been made to the Valuation Officer, the value found in the valuation report submitted by the Valuation Officer alone should be taken into account for determining the value of the gift made and not the value as could be arrived at pursuant to the above said rental method generally, or the said method as enshrined in the abovesaid rule 1BBOn the other hand, learned counsel for the respondent-assessee submits that the first of the abovesaid two questions referred to us is not happily worded and that it would be appropriate to delete the clause "applying rule 1BB of the Wealth-tax Rules, 1957" because the Tribunal did not actually and expressly referred to the said rule 1BB while arriving at the abovesaid conclusion it reached, but only referred to the pre-existing and generally accepted "rental method" while valuing properties let out though learned counsel for the assessee before the Tribunal referred to the said rule 1BB and arrived at the above said figure of Rs. 1, 81, 020 on the basis of the said rule. Incidentally, he also referred to the decision in CWT v. Sharvan Kumar Swarup and Sons 1994 (210) ITR 886, 1994 (6) JT 446 , 1994 (4) Scale 413 , 1994 (6) SCC 623 , 1994 (122) CTR 380, 1994 (76) TAXMAN 620, 1994 AIR(SCW) 5145, 1994 (122) CTR(SC) 380 (SC) (which affirmed the decision of the Gujarat High Court in CWT v. Kasturbhai Mayabhai 1987 (164) ITR 107, 1986 (51) CTR 309, 1986 (24) TAXMAN 427, 1986 (51) CTR(Guj) 309 and, inter alia, approved the decision in Dilip Kumar Mitra v. CWT 1993 (200) ITR 336 , 1993 (71) TAXMAN 141 (Cal)). The Supreme Court, in the abovesaid decision has dealt with a case under the Wealth-tax Act, 1957, and held that the abovesaid rule 1BB of the Wealth-tax Rules is only a procedural rule and is applicable to all proceedings under the Wealth-tax Act, pending on April 1, 1979, when the said rule 1BB came into force. In this connection, learned counsel for the respondent also referred to the following provisions of the Wealth-tax Act. Section 7 provides for determination of the value of the assets assessable to wealth-tax. In this connection, learned counsel for the respondent also referred to the following provisions of the Wealth-tax Act. Section 7 provides for determination of the value of the assets assessable to wealth-tax. Section 7(3), as it existed prior to April 1, 1989, ran as follows "Notwithstanding anything contained in sub-section (1), where the valuation of any asset is referred by the Assessing Officer to the Valuation Officer under section 16A, the value of such asset shall be estimated to be the price which, in the opinion of the Valuation Officer, it would fetch if sold in the open market on the valuation date or, . . ." Section 16A of the Wealth-tax Act, 1957, provides for the Wealth-tax Officer referring the valuation to the Valuation Officer. Section 16A is similar to the abovesaid section 15(6) of the Gift-tax Act We have considered the rival submissions. Even in the above referred case in CWT v. Kasturbhai Mayabhai 1987 (164) ITR 107, 1986 (51) CTR 309, 1986 (24) TAXMAN 427, 1986 (51) CTR(Guj) 309 (Guj), which was affirmed by the Supreme Court in CWT v. Sharvan Kumar Swarup and Sons 1994 (210) ITR 886, 1994 (6) JT 446 , 1994 (4) Scale 413 , 1994 (6) SCC 623 , 1994 (122) CTR 380, 1994 (76) TAXMAN 620, 1994 AIR(SCW) 5145, 1994 (122) CTR(SC) 380 we find that the abovesaid aspect was considered in the context of the above referred to section 7(3) and section 16A of the Wealth-tax Act. The following is the relevant observation of A. M. Ahmadi J., (as he then was), speaking for the Division Bench, which delivered the said judgment "Counsel for the Revenue next contended that section 16A empowers the Wealth-tax Officer to make a reference to the Valuation Officer if in his opinion the returned value is less than the market value of the asset in question. According to him, if rule 1BB were to operate retrospectively, it would render sections 7(3) and 7(4) as well as section 16A(6) redundant. Under section 7(4), the assessee has the option of valuing the property on (i) the valuation date following the date on which he became the owner ; or (ii) on the valuation date relevant to the assessment year commencing on April 1, 1971, whichever is later. Under section 7(4), the assessee has the option of valuing the property on (i) the valuation date following the date on which he became the owner ; or (ii) on the valuation date relevant to the assessment year commencing on April 1, 1971, whichever is later. He pointed out that once a reference is made to the Valuation Officer under section 16A(1), the Valuation Officer is required to follow the procedure set out in the subsequent sub-sections and after his order is received, the law expects the Wealth-tax Officer to complete the assessment in conformity with the estimate of the Valuation Officer. Mr. Shelat, therefore, urged that it would not be possible to apply rule 1BB retrospectively having regard to the scheme of these provisionsIt is indeed true that sub-sections (3) and (4) of section 7 which begin with a non-obstante clause have overriding effect on sub-section (1) of section 7 read with rule 1BB. Once a reference is made to the Valuation Officer, the asset has to be valued in accordance with section 7(3) or 7(4), as the case may be. Sub-section (3) of section 7, however, reiterates the principle of sub-section (1), namely, that the value of an asset shall be estimated to be the price which it would fetch if sold in the open market on the valuation date. In the case of a house owned and exclusively used by the assessee, the assessee has been given the option of valuing the asset on the two dates mentioned in section 7(4) of the Act ; but while valuing the asset under section 7(3) or section 7(4) read with sections 16A(1) and 16A(5), the Valuation Officer must have regard to the well-recognised method of valuation adverted to earlier. Rule 1BB merely introduced one such method--the rental or yield method--with suitable modifications so that it can govern practically all cases of assets used wholly or mainly for residence. It would, therefore, not be inconsistent with the scheme of the Act if we hold that the Valuation Officer would have to estimate the value in conformity with rule 1BB in cases which are pending before him. It would, therefore, not be inconsistent with the scheme of the Act if we hold that the Valuation Officer would have to estimate the value in conformity with rule 1BB in cases which are pending before him. In the case of an asset governed by section 7(4), the choice would remain with the assessee to opt for that estimate which he considers beneficial." (emphasis supplied) So, in the above decision, the above non-obstante clause appearing in section 7(3) of the Wealth-tax Act was taken note of and yet it was held that even when the value-question was referred to the Valuation Officer, the said officer has to fix up the value only in accordance with rule 1BB But, it is a moot question how far in the present case, which is not a wealth-tax case, but a gift-tax case, in the absence of the abovesaid link between the Gift-tax Act or the Rules, on the one hand, and the Wealth-tax Act or the Rules, on the other hand, at the relevant point of time (as mentioned in paragraph 3 (see page 658) above), the abovesaid rule 1BB of the Wealth-tax Rules as such can be applied to the gift-tax assessment in question. Only in this regard, learned counsel for the respondent submits (as also mentioned in paragraph 6 (see page 659) above) that the first of the abovesaid two questions referred to us is not happily worded. According to him, the Tribunal only held that the already well recognised rental method "should be adopted" for the valuation of the properties let out. No doubt, this method came to be recognised by the Government incorporating it in the abovesaid rule 1BB from April 1, 1979. That does not mean, according to him, that the said method could not be adopted earlier either under the Wealth-tax Act or Gift-tax Act. Looking at from that angle, according to him, there need not be the abovesaid link. That does not mean, according to him, that the said method could not be adopted earlier either under the Wealth-tax Act or Gift-tax Act. Looking at from that angle, according to him, there need not be the abovesaid link. That is why, according to him, the Tribunal did not specifically refer to rule 1BB when it finally concluded, as extracted aboveIn support of this submission he also relied on the decision in Jehangir Mahomedali Chagla v. M. V. Subrahmanian 1985 (155) ITR 637, 1985 (45) CTR 180, 1985 (20) TAXMAN 4 (Bom), where Pendse J. (as he then was) held that the rental method as laid down in the above said rule 1BB of the Wealth-tax Rules has to be followed even under the Estate Duty Act, 1953 1963 AIR(SC) 1742, 1964 (2) SCR 608 , 66 BomLR 68 thus: "The Legislature, therefore, to give effect to this harmonious construction inserted sub-section (3) of section 36 in the Estate Duty Act, and in my judgment, the method recognised under rule 1BB for valuation is the only method available to the Controller for valuation of the flat under section 36(1) of the Estate Duty Act . . . Mr. Seervai submitted that as there were no rules under the Estate Duty Act for determining the value of the flat on the basis of the price it would fetch if sold in the open market, the method provided by rule 1BB of the Wealth-tax Rules should be applied and in support of his submission relied on the decision of the single judge in the case of Madhusudan Dwarkadas Vora v. Superintendent of Stamps 1983 (141) ITR 802, 1983 (35) CTR 370 (Bom). . . The learned judge held that the same method provided under rule 1BB of the Wealth-tax Rules must be applied for the purpose of ascertaining the value for payment of estate duty and drew support for the conclusion from the decision of the Mysore High Court in the case of CED v. J. Krishna Murthy 1974 (96) ITR 87 . . . I am in respectful agreement with the conclusion reached by the learned, judge." (emphasis supplied)The following further observation of the Bombay High Court in the abovesaid decision is also significant. . . I am in respectful agreement with the conclusion reached by the learned, judge." (emphasis supplied)The following further observation of the Bombay High Court in the abovesaid decision is also significant. "By far the more prevalent, especially in urban areas, is the annual value method (another name for the abovesaid "rental method"), where the net notional annual rental value of the property is determined in the manner done for income-tax purposes. The amount is then capitalised by a multiplier, depending on the economic factors prevalent at the relevant time. Annual value method is entirely based on the rent realised from the property and the rent is standard or fair rent when it is regulated by rent legislation. The annual value method is a statutorily recognised method for valuation of houses for the purpose of municipal tax, income-tax and wealth-tax and there is no rational explanation why the said method should not be adopted for ascertaining the value of the flat for purposes of estate duty." (emphasis supplied) Therefore, according to learned counsel for the assessee in the present gift-tax case also, the abovesaid rental method has to be adopted. He also emphasised that even CWT v. Kasturbhai Mayabhai 1987 (164) ITR 107, 1986 (51) CTR 309, 1986 (24) TAXMAN 427, 1986 (51) CTR(Guj) 309 (Guj), which dealt with a wealth-tax case, it has been held that even when the matter is referred to the Valuation Officer, he would have to estimate the value in conformity with rule 1BB. As against the abovesaid weighty argument of learned counsel for the assessee, learned counsel for the Revenue could not seriously argue contra excepting to contend that the abovesaid rental method cannot be adopted since the Tribunal has not given a finding that the orders of the authorities below, following the report of the Valuation Officer are perverse. We are unable to appreciate this contention We see very great force in the argument of learned counsel for the assessee, particularly in the light of the following observation of the Supreme Court in CWT v. Sharvan Kumar Swarup and Sons 1994 (210) ITR 886, 1994 (6) JT 446 , 1994 (4) Scale 413 , 1994 (6) SCC 623 , 1994 (122) CTR 380, 1994 (76) TAXMAN 620, 1994 AIR(SCW) 5145, 1994 (122) CTR(SC) 380. "On a consideration of the matter, we are persuaded to the view that rule 1BB is essentially a rule of evidence as to the choice of one of the well-accepted methods of valuation in respect of certain kinds of properties with a view to achieving uniformity in valuation and avoiding disparate valuations resulting from application of different methods of valuation respecting properties of a similar nature and character." * (emphasis supplied) Further, the Tribunal has only remanded the matter back to the Commissioner of Gift-tax (Appeals) for determining the value on the abovesaid rental basis and directed that the said Commissioner would be at liberty to ascertain fresh value of the property on the rental basis through the Departmental valuer and confronting the same to the assessee before taking a decision afresh One other decision was also cited by learned counsel for the assessee, viz., CGT v. Madanlal Patodia 1994 (209) ITR 967 , 1995 (123) CTR 283, 1994 (75) TAXMAN 184 (Cal) dealing with a gift-tax case, but in relation to valuation of unquoted shares of a going concern. The question there was whether rule 1D of the Wealth-tax Rules (which also came into force along with rule 1BB and was omitted with effect from April 1, 1989), would be applicable, when the relevant gift was made in April 1979, and the Calcutta High Court has held that the said rule 1D is applicable in determining the market value of the said shares which had been gifted. In that connection, the Calcutta High Court also observed thus at the end of its judgment: "Moreover, we also observe the fact that the subsequent amendment to the Gift-tax Act has supplanted rule 10(2) by Schedule II to the Act itself where it has been expressly said that the same method of valuation should apply to an asset for the purpose of gift-tax as prescribed by the Wealth-tax Act. Schedule III to the Wealth-tax Act in turn has incorporated in the Act the same method of valuation what has been rule 1D. Rule 1D also stands supplanted. Schedule III to the Wealth-tax Act in turn has incorporated in the Act the same method of valuation what has been rule 1D. Rule 1D also stands supplanted. By incorporating the rules in the enactment, the Legislature has clearly shown its intention to be, from the very beginning, that the break-up value method should be followed in the valuation of unquoted shares of a private company whose articles of association contain restrictive provisions as to the alienation of its shares." (emphasis supplied)In other words, the Calcutta High Court even goes to the extent of saying that the abovesaid Schedule II of the Gift-tax Act read with Schedule III of the Wealth-tax Act, both of which came into force only on April 1, 1989, could be construed as retrospective. But, strictly speaking, in the present case, in the light of the view we have taken above, there is no necessity in deciding the question in hand, to observe as the Calcutta High Court has done at the end of its above-said judgment Thus, before answering the two questions referred to us, we delete the abovesaid clause appearing in the first of the two questions referred to us, viz., "applying rule 1BB of the Wealth-tax Rules, 1957" and answer the said question in the affirmative and against the Revenue. We also answer the second question referred to us in the affirmative and against the Revenue. No costs.