High Court Of Allahabad
Commissioner Of Wealth Tax vs. Dr. H. Rahman
B.P. Jeevan Reddy, C.J. & R.A. Sharma, J.
Sections WT 16A(5), WT 16A(6)
WT Ref. No. 210 of 1979
7th February, 1991
B. P. JEEVAN REDDY, C. J.:
Under s. 27(3) of the WT Act, 1957, the Tribunal has stated the following two questions :
“(1) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in confirming the order of the AAC setting aside the assessment on the ground that the WTO should have given reasons for rejecting the report of the valuers ?”
(2) Whether, on the facts and in the circumstances of the case and in view of the provisions of s. 16A(6) of the WT Act, the WTO is not statutorily obliged to adopt the valuation estimated by the Valuation Officer under s. 16A(5) of the WT Act and complete the assessment in conformity with the estimate of the Valuation Officer ?”
What happened in this case was that the assessee had filed a report of the valuer in support of his valuation. It was not accepted.
The WTO referred the matter to the Valuation Officer under s. 16A(1). On receipt of the valuation report, the WTO accepted the same and made an assessment order in conformity with it. On appeal, however, the AAC allowed the appeal and remitted the matter to the WTO to examine the matter afresh.
The main ground given by the AAC is that the WTO has not given any reasons for rejecting the valuation made by the assessee’s valuer. Against the order of the AAC, the Revenue went up in appeal to the Tribunal which was dismissed, the Tribunal agreeing with the reasoning of the AAC. Thereupon the Revenue obtained this reference. Sub-s. (6) of s. 16A reads as follows : “16A. Reference to Valuation Officer. …… (6) On receipt of the order under sub-s. (3) or sub-s. (5) from the Valuation Officer, the AO shall, so far as the valuation of the asset in question is concerned, proceed to complete the assessment in conformity with the estimate of the Valuation Officer.”
4. A reading of the sub-section shows that the WTO has no option but to proceed to complete the assessment in conformity with the assessment of the Valuation Officer in so far as the valuation of the asset in question is concerned. This is also the view taken by a Division Bench of this Court in M. C. Khunnah vs. Union of India & Ors. (1979) 118 ITR 414 (All) : TC66R.330.
Accordingly, question No. 1 is answered in the negative, i.e., in favour of the Revenue and against the assessee. Question No. 2 is answered in the negative. The WTO is statutorily bound by the valuation report submitted by the Valuation Officer under sub-s. (5) of s. 16A as provided in sub-s. (6) thereof. The correctness of the valuation report may be challenged in appeal but so far as the WTO is concerned, he is bound by it.
The reference is answered accordingly.
[Citation : 189 ITR 307]
