COMMISSIONER OF WEALTH TAX VS MISS DR. VINAY RAE
1995 P T D 1296
[211 ITR 531]
[Rajasthan High Court (India)]
Before G.S. Singhvi and V.K Singhal, JJ
COMMISSIONER OF WEALTH TAX
versus
Miss Dr. VINAY RAE
Wealth Tax Reference Petitions Nos. 8 to 10 of 1987 and 23 to 27 of 1986, decided on 05/04/1994.
Wealth tax---
----Reference---Valuation of assets---Valuation of land---Tribunal adopting value of land situated nearby and ignoring value of developed land situated at a distance---Tribunal's valuation proper---No question of law arises---Indian Wealth Tax Act, 1957, S.27.
A finding which has been arrived at about the valuation of a property is a finding of fact.
Held, dismissing the reference applications, that the Tribunal had adopted the value of a property situated at a distance of 1.5 kames. and ignored the valuation of land which, was developed and sold by the J.D.A. situated at a distance of about 7-8 kms. which could not be considered to be perverse. There was failure on the part of the Revenue to establish the market value of a comparable case before the appellate authority, i.e., the Commissioner of Income-tax (Appeals) or even before the Tribunal. The valuation by the Tribunal did not give rise to any question of law.
G.S. Bapna and K.S. Gupta for Commissioner.
N.M. Ranga for Assessee.
JUDGMENT
V.K. SINGHAL, J.---The Wealth Tax Commissioner has made the application under section 27(3) of the Wealth tax Act, 1957 (hereinafter called as "the Act"), with the prayer that 'the following question which arises out of the order of the Income-tax Appellate Tribunal is a question of law and, therefore, the Tribunal should be. directed to refer the same to this Court:
"Whether, on the facts and in the circumstances of the case, the decision of the Income-tax Appellate Tribunal is perverse inasmuch as the relevant material was not properly evaluated and wrong conclusions were drawn?"
The brief facts of the case are that H.D. Rae was owning agricultural land measuring 14 Bighas If Biswas at Jamuna Diary, Ajmer Road, Jaipur. The value of the said land was declared at the figure of Rs. 1 lakhs. In the assessment year 1971-72, the value was declared at Rs.2 lakhs. Taking into consideration, the situation of the land and the rate at which the land was sold by other persons in the earlier years, in the assessment year 1977-78, the price was taken at a figure of Rs.5,50,000. The Appellate Assistant Commissioner found that the Commissioner 'off income-tax (Appeals) in respect of the assessment years 1974-75 to 1982-83 has determined the value of land at the rate of Rs.20,000 per Bigha.. Considering the, ten per cent. increase in the price of agricultural land from the assessment years 1971-72 to 1977-78, the value was determined at a figure of'Rs.3 lakhs by the Appellate Assistant Commissioner. The Revenue challenged this matter before the Income-tax Appellate Tribunal where it was submitted that the land is situated in a posh locality with ultra modern amenities and lies in the heart of the municipal area surrounded by all facilities like hospital, market, city buses, etc. The assessee's daughter has put up a nursing home in the said land besides a petrol pump. The Vaishali Scheme of the J.D.A. is about 7-8 kms. from the assessee's property where the J.DA. has allotted plots of land at a- reserve price of Rs.120 per sq. yard to the reserved category people like low income group, ex-service personnel, etc. The general auction price for these plots would be more than Rs.180. The Income-tax Appellate Tribunal found that in the assessment year 1972-73, the Wealth Tax Officer has determined the value of this land at Rs.6,46,400 allowing 1/3rd portion for- roads and other development purposes and taking Rs. 20 per sq. yard as the rate since the land rate was between Rs.20 and Rs.100 per sq. yard beyond the assessee's land. The Tribunal observed that:
"We need not go into the details but may point out that selling of land in plots for constructing after developing the same by putting roads, and other amenities would be hardly any test of the market value of the land belonging to an assessee who had not provided these amenities so far. In this behalf, the comparative case quoted on behalf of the assessed, namely, the land of Shri Hari Deo Joshi would probably be a better guide rather than the sale of plots in Vaishali Nagar."
On this basis, the Income Tax Appellate Tribunal came to the conclusion that no comparable cases of sales of land in the area were pointed out by any of the authorities below and, in these circumstances, the value estimated by the Commissioner. of Income-tax (Appeals) was accepted as the correct one. The value which was estimated by the Wealth Tax Officer is as under:
| | Rs. |
| "1974-75 | 12,92,800 |
| 1975-76 | 16,16,000 |
| 1977-78 | 5,50,000 |
| 1978-79 | 25,85,600 |
| 1979-80 | 29,08,800 |
| 1980-81 | 32,32,000 |
| 1981-82 | 35,55,200 |
| 1982-83 | 42,01,600" |
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The Commissioner of Wealth tax estimated the value of the land per Bigha for those years as under:--
| | Rs. |
| "1974-75 | 18,000 |
| 1975-76 | 20,000 |
| 1978-79 | 20,000 |
| 1979-80 | 22,000 |
| 1980-81 | 25,000 |
| 1981-82 | 26,000 |
| 1982-83 | 28,000 |
The application submitted under subsection (1) of section 27 by the Commissioner was rejected on the ground that no question of law arises. The question framed above points out that the finding is perverse. At the time of hearing the arguments, we asked learned counsel for the Revenue as to which of the documents or evidence has not been .taken into consideration so that it could be considered whether a question of law arises or not. The submission of learned counsel for the Revenue is that the Tribunal has erred in ignoring the value which was prevailing at Vaishali Nagar. We are afraid, the adoption of value of a particular asset which is based on the valuation of a property which is situated nearby at a distance of 1 or 1-1/2 k.ms., namely, that of Har Deo Joshi, and ignoring the valuation of land which is developed and sold by the J.D.A. situated at a distance of about 7/8 k.ms. cannot be considered to be perverse. It is an established principle of law that for determining the market value of a particular asset the rate prevailing has to be taken and which is the? similarly situated land is a question of fact. It has not been denied that the land of J.D.A. in Vaishali Nagar is at a distance of 7 or 8 kms and the land of Har Deo Joshi which is at about 1-1/2 kms and that the nature of the land of Har Deo Joshi was similar to that of the assessee, whereas the land of J.DA. was fully developed having roads and other facilities. An inference from facts would be a question of fact. If some inference is based on some evidence had it been present that any evidence or material was not considered then only it could be said that the finding is perverse or a question of law arises out of the order of the Tribunal. Even the finding, has not been established to be contrary to evidence on record nor could it be said that the finding is perverse or that there?s no direct nexus between the conclusion on facts or the facts on which the conclusion is based. No material evidence has been ignored. It may be a fact that the estimation by the Commissioner of Wealth tax (Appeals) as confirmed by the Tribunal may not be of a fair market value but who is to be blamed for that. For the purpose of valuation of land, the established principle of? comparable cases in the vicinity has been followed. It was the duty of the Revenue that when the example of Shri Har Deo Joshi's land was submitted before the Commissioner of Wealth tax, the Department should have taken pains at that stage to show that the valuation of other lands which are in the vicinity is at a higher figure. No document was produced at that stage, nor was it pointed out as to how the valuation of land of Shri Har Deo Joshi was not relevant for the purpose of valuation of the assessee's land. From the various documents and the file we find that there was failure on the part of the Revenue to establish the market value of a comparable case before the appellate authority, i.e. the Commissioner of Income-tax (Appeals) or even before the Income Tax Appellate Tribunal. A finding which has been arrived at about the valuation of the property is a finding of fact for which no direction could be given under section 27(3) of the Act to the Income Tax Appellate Tribunal to refer the question.
Consequently, we find no merit in the reference applications. They are hereby dismissed.
M.B.A./967/T.F. ???????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????? ??????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????? Order accordingly.