(a) Wealth Tax Act (XV of 1963)---

----S.27---Appeal to High Court---Question as framed could not be said to have arisen out of the order of the Tribunal inasmuch as it was never contended or argued before the Tribunal---High Court rejected the appeal.  

(b) Wealth Tax Rules, 1963---

----R.8(3)---Wealth Tax Act (XV of 1963), S.27---C.B.R. Circular No.7 of 1994, dated 10-7-1994---Valuation of assets---Land and building Assessees had filed their wealth tax returns indicating different values for the movable properties owned by them---Assessing Officer, after discarding the declared value of residential houses or commercial properties, proceeded to determine their value by clubbing the cost of construction and the value of land as determined by the District Collector under S. 27-A, Stamp Act, 1899---Validity---Only method provided by law in such cases was R.8(3), Wealth Tax Rules, 1963---Separate valuation of cost of construction and land for the purpose of assigning of value to a property could not be made---C.B.R Circular No.7 of 1994, dated 10-7-1994 could not hold good as against R.8(3), Wealth Tax Rules, 1963---Term and expression "GALV" as defined in explanation to R.8(3), Wealth Tax Rules, 1963 by itself implied that it was not necessary for a building or property to have actually been let out for the purpose of "GALV" rule---Said Explanation defined "Gross Annual Rental Value" to be the one for which the property might reasonably be expected to be let from time to time---Definition had itself indicated that "GALV" was only a notional value on which a property could reasonably be expected to be let from year to year---Actual renting out of property for the purpose of application of R.8(3), therefore, was not required at all.  

K. T. Kuruvilla v. District Valuation Officer and another 2001 PTD 848 distinguished.

Saqib Hassan and Mian Yousaf Qamar for Appellant.

Dr. Ilyas Zafar, Malik Tabbasam Maqsood Khan and Ch. Anwarul Haq for Respondent.

Date of hearing: 18th October, 2004.

JUDGMENT

NASIM SIKANDAR, J.---Through this single judgment we intend to dispose of Departmental Wealth Tax Appeals Nos. 274, 305, 306; 307, 308, 309, 310, 311, 312, 313, 314, 315, 316, 318, 319, 320, 321, 322, 323, 324, 325, 326, 327, 328, 329, 330, 331, 332, 333 334, 335, 336, 337, 338, 60, 61, 62, 63, 64, 65, 66, 67, 68, 69, 44, 45, 289; 290, 291, 4, 243 of 2002 and 13, 14, 15, 16, 1 7, 18, 19, 20, 21, 22, 23, 14, 25, 26, 27, 28, 29 and 30 of 2003.

2. In these departmental appeals following question is stated to have arisen out of the different orders of the Tribunal:--

"Whether in the facts and circumstances of the case learned ITAT is justified in directing that value of constructed properties be adopted on GALV basis when the property has not been let out. "

2-A. It appears that the assessees filed their wealth tax returns indicating different values for the movable properties owned by them. The Assessing Officer after discarding the declared value of residential houses or Commercial properties proceeded to determine their value by clubbing the cost of construction and the value of land as determined by the District Collector under section 27-A of the Stamp Act, 1899.

3. The assessees succeeded in first appeal while the departmental appeals against the first appellate order were dismissed. Learned Tribunal disapproved separate determination of valuation of land and cost of construction of the properties declared by the assesses with reference to one of their earlier decisions. The Tribunal directed that the method of valuation under Rule 8(3) of the late Wealth Tax Rules, 1963 should be adopted.

4. After hearing the learned counsel for the Revenue we are of the view that the appeals filed by the Department need to be rejected for the following reasons:--

Firstly, the question as framed cannot be said to have arisen out of l the order of the Tribunal inasmuch as it was never contended nor argued before the Tribunal that the properties in respect on which the valuations were determined by the Assessing Officer were not let out.

Secondly, learned counsel for the Revenue has not been able to point out any provision of law, the Wealth Tax Act, 1963, its Rules 1963 or any authoritative pronouncement by a superior Court in support of separate valuation of cost of construction and land for the purpose of assigning of value to a property. Learned Tribunal is correct in pointing out that the only methods provided by law in such cases is Rule 8(3) of the said Rules.

Thirdly, as against the provisions of the said rules C.B.R. Circular No.7 of 1994, dated July 10, 1994 cannot hold good. Any instructions by an administrative authority against the express provisions of law or the rules framed thereunder cannot be employed to defeat the law or the procedure to the detriment of the rights of the taxpayer.

Lastly, the term and expression GALV as defined in explanation to sub-rule (3) of Rule 8 by itself implies that it is not necessary for a building or property to have actually been let out .for the purpose of application of GALV rule. The said explanation defines "Gross Annual Rental Value" to be the one for which the property might reasonably be expected to be let from tune to time. As noted above, the definition itself indicates that GALV is only a notional value on which a property could reasonably be expected to be .let from year to year. The actual renting out of property for the purpose of application of the rule, therefore, is not required at all.

5. The case relied upon by the learned counsel for the Revenue re: K.T. Kuruvilla v. District Valuation Officer and another (2001 PTD 848) = (241 ITR 691) is not relevant. There is nothing on record to show that in the Indian Wealth Tax Act, 1957 Schedule ITI Rules 3 & 20 there is a provision equivalent to Rule 8(3) of the Wealth Tax at Rules, 1963. In absence of a comparable provision in the Wealth Tax Rules, 1963 the ratio settled in the judgment from a foreign jurisdiction cannot be made applicable. On the other hand the impugned order of the Tribunal is supported by the clear provisions of Rule 8(3) of the Wealth Tax Rules 1963.

6. Therefore, these departmental appeals shall be dismissed.

M.B.A./C-38/L Appeals dismissed.