Wealth tax--

---- Valuation of industrial property---Revision of Assessing Officer's order by Commissioner--No finding that valuation accepted by Assessing Officer was prejudicial to revenue---Commissioner referring to material divergence - in value and setting aside assessment order---Appellate Tribunal justified in treating Commissioner's order as erroneous---No question of law arises, for reference to High Court---Wealth Tax Act, 1957, Ss.7, 25(2) & 27(1).

The respondent had included in its wealth tax return an industrial property covering 4,696 square yards with the report of a registered valuer who had valued the entire property at the rate of Rs.140 per square yard. There was a report by a second valuer who had valued 1,335 square metres of the property at Rs.200 per square metre and the remaining area of 2,378.52 square metres at Rs.10 per square metre. The total valuation by the second valuer was at Rs. 2,90,877.20, whereas the total value, according to the first valuer, was Rs. 6,57,300. The Wealth Tax Officer completed the assessment adopting .the valuation by the first valuer. In suo motu revision, the Commissioner referred to the rate of Rs. 200 per square metre adopted by the second valuer as well as the rate for land given by the Ministry of Works arid Housing at Rs.1,800 per square yard for commercial land and the values varying from Rs.191 to Rs.210 per square metre in respect of land in industrial plots and values varying from Rs. 287 to 315 per square metre for commercial plots fixed by the Delhi Development Authority (D.DA.) and, without arriving at a finding that the assessment was prejudicial to the Revenue, set aside the Officer's assessment. On appeal, the Appellate Tribunal came to the conclusion that the Commissioner's order in revision was erroneous and also held that he had not given any express finding that the Wealth Tax Officer's order was prejudicial to the Revenue. The Tribunal having declined to state a case, the Department applied to the High Court for an order directing the Appellate Tribunal to state a case:

Held, dismissing the petition, that apart from the fact that the Commissioner had nowhere formed an opinion that the assessment order was prejudicial to the interests of the Revenue, the Commissioner overlooked the fact that the rate of Rs. 1,800 per square yard was in respect of commercial property and not industrial property, and that two different rates were fixed by the D.DA. in respect of industrial land and commercial land, thus clearly showing that the rate for commercial land was not necessarily the same as that for an industrial plot for which the rate was lower. Further, the Ministry and the D.DA. were at great variance with each other.-The Wealth Tax .Officer had adopted the valuation of the first valuer who gave a greater value to the property in question than that estimated by the second valuer and the Officer could not be said to have acted in a manner prejudicial to the interests of the Revenue. No question of law arose out of the order of the Tribunal.

By the Court: "In the absence of specific instances of purchase and sale, it is obvious that a certain amount of guesswork is involved in determining the price of the land".

Rajendra and R.C. Pandey for Petitioner.

P.N. Monga and Gagan Naphrey for Respondent.

JUDGMENT

The petitioner seeks reference of the following two questions:

(1)Whether, on the facts and in the circumstances of the case, the Tribunal was correct in not upholding the order of the Commissioner of Wealth Tax under section 25(2) of the Wealth Tax Act, 1957?

(2)Whether, on the facts and in the circumstances of the case, the Tribunal was correct in holding that the instructions of the Ministry of Works and Housing were not on record when it was a general circular published in the Official Gazette and as such did exist at the time of framing the assessment and the Assessing Officer was required to have knowledge of the same?"

In the present case, the question involved is with regard to the valuation of the property situate at 39, Najafgarh Road, New Delhi. This property is an industrial unit and, before the Assessing Officer, a valuation report prepared by a registered valuer had been furnished by the assessee.

The Wealth Tax Officer accepted the report of the registered valuer and computed the net wealth of the assessee.

The Commissioner of Wealth Tax then instituted proceedings under section 25(2) of the Wealth Tax Act, 1957. He came to the conclusion that the Wealth Tax Officer did not take into consideration the fact that a letter, dated June 27, 1979, issued by the Ministry of Works and Housing had valued the commercial property in Najafgarh area at Rs.1,800 per square yard. He further held that the D.D.A. had also fixed the land prices for industrial plots in the area which varied from Rs. 191 to Rs.210 per square metre and, in respect of commercial properties, the prices had been fixed by the D.DA. varying from Rs.287 to Rs.315 per square metre. He also took into account that another valuer, appointed by the assessee, had valued the land at Rs.200 per square metre in respect of the area found within the limit permissible under the Urban Land (Ceiling and Regulation) Act, 1976, and he had valued the surplus land at Rs. 10 per square metre. The Commissioner then concluded that the Department did not have a chance to look at the valuation report and to get the land valued. The order of the Wealth Tax Officer was, accordingly, set aside.

The Tribunal, in an appeal filed before it, came to the conclusion that the order of the Commissioner was erroneous. It also held that the Commissioner had not given any express finding that the Wealth Tax Officer had failed to make any inquiry or that his orders were erroneous or prejudicial to the interests of the Revenue.

Being aggrieved, the Commissioner filed an application under section 27(1) for referring the aforesaid two questions to this Court. The Tribunal, however, rejected the said application.

It is contended before us by learned counsel for the petitioner that the Commissioner was fully justified in exercising his jurisdiction under section 25(2) and when. he came to the conclusion that the order of the Wealth Tax Officer should be set aside, the Tribunal ought not to have quashed the order of the Commissioner.

It is true that ordinarily the Commissioner has been given jurisdiction to examine, under section 25(2), whether the order passed by the Assessing Officer is erroneous in so far as it is prejudicial to the interests of the Revenue, but in the instant case, however, the Commissioner has nowhere formed an. opinion that the assessment order was prejudicial to the interests of the Revenue. Apart from that jurisdictional infirmity, the Commissioner overlooked the fact that the rate of Rs:1,800 per square yard was in respect of commercial property. The Commissioner himself has referred to two different rates fixed by the D.DA. in respect of industrial land and commercial land. This clearly shows that the rate of the commercial land is not necessarily the same as the rate for an industrial plot of land. Furthermore, the rate for an industrial plot is lower than that of the land for commercial use. What is more striking is that the two Governmental authorities, viz., the Ministry of Works and Housing and the D.D.A. have given rates for land which are at great variance with each other. Whereas the rate for commercial land has been fixed at Rs. 1,800 per square yard by the Ministry of Works and Housing, the D.DA. on the other hand, has fixed the value for the said land between Rs.287 and ks.315 per square metric. This itself shows divergence in the opinion of the authorities with regard to the valuation of land. In the absence of specific instances of purchase and sale, it is obvious that certain amount of guesswork is involved in determining the price of the land.

In the instant case, the Wealth Tax Officer has relied upon the valuation report which had fixed the value of the entire land at Rs.140 per square yard. The Commissioner has sought to criticise this and in this behalf has placed reliance upon the valuation of another valuer who had valued the land at Rs.200 per square metre. The Commissioner, however, overlooked the fact that the total valuation of land arrived at by the first valuer was far in excess of that of the other valuer. Though the first valuer had taken the rate to be Rs. 140 per square yard, he had applied that rate to the entire 4,696 square yards of land and determined the valuation of the land at Rs.6,57,300. The other valuer, on whose report, reliance was sought to be placed by the Commissioner, had valued only 1,335.46 square metres of land at Rs.200 per square metre, whereas the remaining 2,378.52 square metres of land has been valued at Rs.10 per square metre and the total valuation of the land has been determined by the second valuer at Rs. 2,90,877.20. The Wealth Tax Officer having accepted the valuation of the first valuer, who had determined the land price at a much higher figure of Rs. 6,57,300 as compared to the valuation by the second valuer, who had determined the value of the land at Rs.2,90,877.20, could not be said to have acted in a manner prejudicial to the interests of the Revenue.

In these circumstances, in our opinion, no question of law arises and the petition is dismissed.

There will be no order as to costs.

M.BA./2272/T Petition dismissed.