COMMISSIONER OF WEALTH TAX VS GAYATRIDEVI
1997 P T D 1075
[222 I T R 797]
[Madhya Pradesh High Court (India)]
Before A. R. Tiwari and N. K. Jain, JJ
COMMISSIONER OF WEALTH TAX
versus
Smt. GAYATRIDEVI
Miscellaneous Civil Case No. 69 of 1991, decided on 27/02/1996.
Wealth tax---
----Reference---Valuation of assets---Conflict of opinion between High Courts---Whether value of land should be added while valuing property on rent capitalisation method---Is question of law to be referred---Indian Wealth Tax Act, 1957, S. 27(1).
Whether the tribunal was right in holding that the value of the land should not be added while valuing the property on the rent capitalisation method is a question of law to be referred.
CWT v. Ram Saran Kajriwal (1987) 168 ITR 485 (All.) and Ramachandran V.C. v. CWT (1980) 126 ITR 157 (Kar.) ref.
D.D. Vyas for the Commissioner.
Nemo. for the Assessee.
JUDGMENT
A.R. TIWARI J.---The applicant Commissioner of Wealth Tax, Bhopal has filed this application under section 27(3) of the Wealth Tax Act, 1957 (for short "the Act"), seeking direction to the Tribunal to state the case and refer the proposed two questions of law, as extracted below, arising out of the order, dated January 17, 1990, passed by the Tribunal in W.T.A. Nos.36 and 65/Ind of 1989 relating to the assessment year 1986-87 for our opinion:
"(i) Whether, on the facts and in the circumstances of the case, the Tribunal was right in confirming the order of the Commissioner of Wealth Tax (Appeals) holding that the value of the land should not be added while valuing the property on the rent capitalisation method?
(ii) Whether, on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal was justified in law in confirming the order of the Commissioner of Wealth Tax Appeals holding that the interest rate of 11 per cent. should be applied on deposits received from tenants for working out rent receivable by the assessee against the rate of 15 per cent. applied by the Valuation Officer?"
Briefly stated, the facts of the case are that the assessee (non- applicant) constructed 40 shops on a leasehold land. For the assessment year 1986-87, the assessee declared the value of the shops at Rs.3,48,089 on the basis of cost of construction which she subsequently revised on the basis of the approved valuer's report indicating Rs.4,30,000. In the assessment, for the assessment year 1986-87, the Wealth Tax Officer on the basis of the report of the Departmental Valuer determined the value at Rs.24,65,000. The assessee had also received deposits from the tenants amounting to Rs.7,56,000 on which the Departmental Valuer calculated interest at 15 per cent. and treated the same as part of the rent. Aggrieved the assessee filed the appeal before the Commissioner of Wealth Tax (Appeals). The appellate Authority held that the value of land should not be added and that the interest should be calculated at 11 per cent. This order dissatisfied both the sides. The Department as well as the assessee filed appeals before the Tribunal. The Tribunal dismissed the appeals The Tribunal confirmed the order of the commissioner, Wealth Tax (Appeals) holding that the value of land should not be added while valuing the property on rent capitalisation method and the interest at 11 per cent. be applied on deposits instead of 15 per cent. as applied by the Valuation Officer. The Department felt aggrieved by the order of the Tribunal and thus filed the application under section 27(1) of the Act. The application, as registered R.A. No.58/Ind of 1990, was rejected on November 30, 1990. The Department has then filed, this application.
We have heard Shri D.D. Vyas, learned counsel for the applicant/Department. None appeared for the non-applicant/assessee.
Shri Vyas submitted that question No.(i), as noted above, deserves to be referred by the Tribunal and question No.(ii) is not pressed. He submits, as regards question No.(i), there is a conflict of opinion between the High Courts. He has placed reliance on CWT v. Ram Saran Kajriwal (1987) 168 ITR 485 (All.) and Ramachandran V.C. v. CWT (1980) 126 ITR 157 (Kar. )
As we are making a direction to the Tribunal to state the case and refer the first question of law, we do not desire the express any opinion, one way or the other, on the merits of the matter. However, in view of the conflict of opinion, we are satisfied that prima facie a case for direction is made out.
In the result, we allow this application in part, as noted above, and call upon the Tribunal to state the case and refer question No.(i) for our consideration and opinion. We also direct to make an endeavour to comply with this direction within ten months from the date of the receipt of this order by it.
There shall be no order as to costs.
Counsel fee is, however, fixed at Rs.750 for the, applicant, if certified
A copy of this order shall be transmitted to the Tribunal immediately compliance, as directed above.
M.B.A./1211/FCAppeal accordingly.