High Court Of Delhi
Mahavir Prasad Jaipuria & Anr. vs. Gift Tax Officer & Anr.
Sections 6, Sch. II, Rule 1
Asst. Year 1975-76
S.B. Sinha, C.J. & A.K. Sikri, J.
Civil Writ Petn. No. 263 of 1980
31st January, 2002
Anoop Sharma, R.K. Raghwan & M. Husain, for the Petitioners : Sanjeev Khanna & Rajiv Awasthy, for the Respondents
S.B. SINHA, C.J. :
The petitioner in this case has questioned the valuation made by the concerned respondents under the provisions of GT Act. The valuation of the property was made by the second respondent upon issuing a show-cause notice to the petitioner. The proposed valuation of the said property is the subject-matter of the writ petition.
2. In view of the order proposed to be passed by us, it is not necessary to state the facts of the case in great details. Suffice to note that the petitioner submitted gift-tax returns for the year 1975-76 including the valuation of his
1/3rd share of the property situate at 8, Prithviraj Road, New Delhi with the first respondent who appointedsecond respondent as the Valuation Officer. Respondent No. 2 issued notice to the petitioner intimating him about the valuation to be Rs. 4,34,400. The petitioner filed objections and informed that the assessments for the years 1971-72 to 1977-78 were subject-matters of CW No. 649/79 pending in the High Court. The second respondent, however, assessed the property on the basis of earlier order dt. 24th Feb., 1978, at the same value under s. 16A(5) of the WT Act. Sec. 6 of the GT Act reads thus : “6. Value of gifts, how determined.â(1) Subject to the provisions of sub-s. (2) the value of any property, other than cash, transferred by way of gift shall, for the purpose of this Act, be its value as on the date on which the gift was made and shall be determined in the manner laid down in Sch. II. (2) Where a person makes a gift which is not revocable for a specified period the value of the property gifted shall be the capitalised value of the income from such property during the period for which the gift is not revocable.”
3. It is thus not in dispute that the valuation of the property which was the subject-matter of gift is required to be done in terms of Sch. II appended to the GT Rules which reads as under : “SCHEDULE II [See s. 6(1)] Rules for determining the value of property gifted
1. Value of gifted property, how to be determinedâSubject to the provisions of rr. 2 to 7, the value of “any property” other than cash, transferred by way of gift shall, for the purposes of this Act, be determined in accordance with the provisions of Sch. III to the WT Act, 1957 (hereinafter referred to as the WT Act), which shall apply subject to the following modifications, namely : In the said Schedule : (a) references by whatever form of words to the WT Act shall be construed as reference to this Act. (b) in r. 5, the reference to the year ending on the valuation date shall be construed as a reference to the previous year as defined in this Act; (c) save as provided in cl. (b), references to the valuation date shall be construed as references to the date on which the gift was made; (d) reference to s. 7 of the WT Act shall be construed as references to s. 6 of this Act; (e) references to s. 16A of the WT Act shall be construed as references to sub-s. (6) of s. 15 of this Act.”
4. Keeping in view the fact that the mode of valuation has been laid down in the aforementioned Sch. II, there cannot be any doubt whatsoever that the said valuation is required to be made strictly in terms thereof. The said rules are procedural in nature and partake of the character of a rule of evidence. A rule, which is procedural in nature, will apply to a pending proceeding also. The respondents admittedly have not valued the property in terms of the said rules. In our opinion, this interest of justice could be subserved if this writ petition is disposed of with a direction that the subject property be valued in terms of rules as contained in the Sch. II of the GT Rules. For the reasons aforementioned, this writ petition is disposed of with the aforementioned directions. But in the facts and circumstances of the case, there shall be no order as to costs.
[Citation : 256 ITR 329]