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1996 DIGILAW 820 (MP)

Commissioner Of Wealth-Tax v. H. S. Shrivastava

1996-09-12

A.K.MATHUR, S.K.KULSHRESTHA

body1996
JUDGMENT 1. This is a reference at the instance of the Department under Section 27(1) of the Wealth-tax Act, 1957, and the following question of law has been referred by the Income-tax Appellate Tribunal for answer by this court : 7 "Whether, the Tribunal was justified in holding that Rule 1BB should be applied for valuing the property in question, even though Block No. 290-DI was let out to an office for non-residential purposes ?" 2. The brief facts giving rise to this reference are that the assessee is a Hindu undivided family. It owned property No. 290, Napier Town, Jabalpur, which consists of two blocks, namely, 290-D and 290-DI. Block No. 290-D is under self-occupation whereas Block No. 290-DI was let out to the Income-tax Department. The aforesaid property was got valued by the Wealth-tax Officer from the Departmental Valuation Officer, who valued both the blocks of the property at Rs. 7,15,000. The assessee questioned the above valuation and submitted that the valuation in question should have been worked out under Rule 1BB in respect of the Block No. 290-DI and in this manner, the value of the property should be taken at Rs. 2,13,500. As regards the self-occupied portion, it was pleaded that the value in question should be pegged at the cost of construction in terms of the Explanation to Sub-section (4) of Section 7 of the Wealth-tax Act, 1957. 3. The learned Appellate Assistant Commissioner accepted the above submissions of the assessee and accordingly valued Block No. 290-DI at Rs. 2,73,000 for the assessment year 1979-80 and for Rs. 3,00,000 for the assessment year 1980-81 and the value of Block No. 290-D, i.e., the let out portion was taken at Rs. 2,13,500, in terms of rule 1BB of the Wealth-tax Rules. 1957 (for short "the Rules"), Aggrieved by the order of the Appellate Assistant Commissioner, the Department filed an appeal and the Tribunal by making reference to Biju Patnaih (1 SOT 623), remanded the case back to the Wealth-tax Officer for reassessment of the property of the let out portion as well as of the self-occupied portion in accordance with the judgment of the Special Bench of the Tribunal, after affording reasonable opportunity of being heard to the assessee. Hence, the Department requested the Tribunal to refer the aforesaid question of law to this court for answer and, accordingly, the aforesaid question of law has been referred by the Tribunal. 4. Learned counsel for the Revenue has submitted that the approach of the Tribunal is not correct. Learned counsel submitted that Rule 1BB of the Rules is not applicable to the case of the assessee ; therefore, there was no occasion to have remanded the case to the Wealth-tax Officer for reassessment. As against this, learned counsel for the assessee submitted that the view taken in the case of Biju Patnaih was affirmed by the Supreme Court in another case of CWT v. Sharvan Kumar Swamp and Sons [1994] 210 ITR 886 in which their Lordships of the Supreme Court have held that Rule 1BB of the Rules is a procedural one and it has been observed (headnote) : " Rule 1BB partakes of the character of a rule of evidence. It deems the market value to be the one arrived at on the application of a particular method of valuation which is also one of the recognised and accepted methods. The rule is procedural and not substantive and is applicable to all proceedings pending on April 1, 1979, when the rule came into force." 5. It was also observed that (hoadnote) : " Procedural law, generally speaking, is applicable to pending cases. No suitor can be said to have a vested right in procedure. " 6. The Tribunal has only observed in the following terms : ". . . In view of this judgment of the Tribunal, we are of the considered opinion that the order of the Appellate Assistant Commissioner is such that it cannot be sustained in law. We set aside his order along with the order of the Wealth-tax Officer for both the years and direct the Wealth-tax Officer to value the property of the let out portion as well as of the self-occupied portion in accordance with the judgment of the Special Bench of the Tribunal in the case of Biju Patnaik. This should be done after affording reasonable opportunity of being heard to the assessee." 7. It is open to the Revenue to raise all legitimate objections before the authorities. Any observation made by the Tribunal in this regard is only obiter and they are not binding on the Wealth-tax Officer. This should be done after affording reasonable opportunity of being heard to the assessee." 7. It is open to the Revenue to raise all legitimate objections before the authorities. Any observation made by the Tribunal in this regard is only obiter and they are not binding on the Wealth-tax Officer. The Wealth-tax Officer is free to decide the matter in accordance with law. Hence, the apprehension of learned counsel for the Revenue that any observation will prejudice the case of the Department is baseless. It is clarified that the assessing authority shall proceed with the matter objectively and decide the same after hearing the parties in accordance with law. 8. Hence, we answer the question against the Revenue and in favour of the assessee.