TMI Blog1983 (11) TMI 149X X X X Extracts X X X X X X X X Extracts X X X X ..... sent by registered post and the acknowledgement of their notices are on record. Despite the notices being served on the respondents and the Valuation Officer, they did not make their appearnces, but the records of the Valuation Officer had been made available by the Departmental Representative Shri Srivastava. These appeals are being disposed of by considering carefully the arguments of the Departmental Representative, assessment records, the records of the Valuation Officer and also the paper book as filed by the respondents. 2. The facts of the case are being briefly brought out below. The firm M/s. Jaimal Singh Sons has four partners Shri Jai Singh, Shri Jaimal Singh, Shri Ajit Singh and Smt. Dhanraj Kaur, sharing the profit of the firm in the ratios of 20%, 50%, 15% and 15% respectively. The said firm was constituted by a deed dated 1.7.1970. The firm had constructed a cinema building during the financial year 1976-77 on a land, which is being owned by one of the partners, Shri Jai singh. The said cinema building called 'Alka Talkies' was constructed in the town Pipariya. The three assessees, viz, Shri Jai Singh, Shri Jaimal Singh and Shri Ajit Singh had returned their in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6.2.1985 are mentioned as considered. The rates, values, plus the adjustments fittings etc. for the two valuation dates as on 31.3.1982 and 31.3.1983, as per the Valuation Officer's report dated 28.6.1985 are reproduced below :-- 31st March, 1982 31st March, 1983 Area Rate Amt. Rate Amt. (in sq.m.) Main Auditorium 555/27 626 2,84,999 712 3,24,152 Double storeyed side verandah 174/75 689 1,20,403 783 1,36,829 Foyer ground floor 126/67 719 91,076 818 1,03,616 Front verandahs at 120/40 658 79,223 749 90,180 first second floors Balcony 115/39 250 28,848 300 34,617 Platform, panelling etc. 20,231 24,062 Less : ACC roofing 40,137 45,510 etc. ---------------- ---------------- Net reproduction cost 5,84,643 6,67,946 Add : for services @ @ 18% on 18% on Rs. 5,64,412 1,01,594 6,43,884 1,15,899 : Builders' efforts 2% 13,725 15,677 ---------------- ---------------- 6,99,962 8,99,522 Less : Depreciation 69,997 8,99,522X 97,148 6,99,962 X 90/100 X 5/50 90/100X 5/50 ---------------- ---------------- 6,36,965 8,02,374 ---------------- ---------------- Add : Machinery chairs in hall 74,605 89,690 ---------------- ---------------- 7,11,570 8,92 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iew)/VO(Bhopal)/1624 dated 10.2.1986 on the subject of valuation of the cinema building, stated that valuation report is erroneous and not in the interest of revenue and therefore not acceptable for implementation. He further observed that land being owned by one of the partners, viz. Shri Jai Singh having 20% share of the profits, this factor should have been given serious consideration. He made further observation that some parts of the building like canteen and another structure have been left out by the Valuation Officer as belonging to the father of Shri Jai Singh without mentioning his name. He then stated that V.O.'s report is clumsily prepared and is vague about the interrelationship of the partners. He then directed that their relationship be clearly indicated, as to who is whose father, on 1976, which of the partners had their own source of income independent of HOF and if so their I.T. permanent a/c No. He then added that it appears to be a role played by the land owner, to throw his property into hotch potch of family or AOP or BOI. He then observed if that in case his earlier observations are found to be so, then the entire property including the ancillary structures a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he E.E. (Valuation), Bhopal, reminded him that the revised valuation report had not been received. The revised valuation report dated 22.12.1986 was received by the ITO, A-Ward, Itarsi on 24-12-1986. As per this report, the valuation of half share in the cinema building--Alka Talkies for the valuation dates 31-3-1982, 31.3.1983 has been specified, as Rs. 4,51,800 and Rs. 5,09,200 respectively. 9. In this report in para 5, the land area has been mentioned as 16,720 sq.ft. The said property is stated to have been inspected on 25-10-1986. The constructed plinth area is mentioned as given below : Main Auditorium hall 455.44 sq.m. (Average height 32 feet) Double storeyed side verandah 173.98 sq.m. Front portion-three storeyed 247.17 sq.m. Balcony 115.43 sq.m. The types of construction etc., are as was in the earlier reports except that the height of the roof in auditorium hall has been taken at 32 feet, while in the earlier two reports, the height has been taken at 30 feet. The assessee was allowed an opportunity, and the assessees objection vide his letter of 25.11.1986 has been stated as considered. The assessee also filed the approved valuer Shri J.H. Kotecha's report g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the V.O. was illegal, but the returned value should be accepted. The AAC had issued the notice to the V.O. and the V.O. Bhopal submitted in his letter of reply dated 20.10.1987 to the AAC, the reasons which called for the first revision, the second revision and the report dated 22.12.1986. He gave the reasons for revision as mistakes. He also gave the areas as taken in first and second reports as also in the final report. He also stated that the rates adopted in the final report as proper. The comparative areas as adopted initially and finally are reproduced below for facility : Initial report Final report (sq.m) (sq.m) Auditorium hall 455.27 455.44 Side verandah 174.75 173.98 Front portion 126.67 + 120.40 247.07 247.17 Balcony 115.39 115.45 Wooden pannelling 150.32 150.37 False ceiling 415.76 415.92 Collapsible steel shuttering Not accounted 30.87 12. The AAC analysed the reports of valuation and was of the view that giving of deductions for joint ownership and video piracy was not against any rule or procedure. He made the observation that the V.O. had pleaded that, (a) whether deduction on account of video piracy was to be allowed or not was very debatable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the order to the W.T.O. Sec. 16A(6) provides that the W.T.O. on receipt of the V.O.'s report on the property, adopt it and complete the assessment. 14.2 From what has been observed in para 14.1 above, it is clear that the V.O. once he serves his report on estimation of the value of the property on the WTO, he becomes functus officio as far as the valuation of the property is concerned. The V.O. has not been provided with any powers of cancelling/recalling his estimation. 14.3 Sec. 35 of the W.T. Act allows for rectification of any mistake apparent from a the record. Sec. 35(1)(aaa) and sub-sec. (6A) provide for the power to the V.O. for amendment of the order passed u/s 16A(5) and in case the amendment results in enhancement of the value of the property, he shall send a copy of such amendment to the WTO, who shall amend the assessment on that basis. 14.4 Thus as per provisions of sec. 35(1)(aaa) and sec. 35(6A) the V.O. has been empowered to amend his valuation made by him u/s 16A(5) only if the report contains any mistake apparent from the record. The amendment of the order made u/s 16A(5) can be made by the V.O., of his own motion in case he finds that his report contains ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .O. Bhopal to whom the reference was made by the WTO on 31.1.1984 and there is absolutely no dispute that he had the proper jurisdiction under the Act, to determine the fair market value of the property. In this report he had allowed deduction of (a) 10% for joint ownership ; (b) 10% for video piracy and (c) 10% for the value determined by the profit capitalisation method exceeded by 10%. In this report the land has been mentioned as belonging to one of the partners and not to the firm. The Superintending Engineer (Valuation) sitting at Jaipur, issued his office order dated 9.8.1985 of setting aside for rectification the valuation made on 28.6.1985. He further directed Shri N.S.Raheja (V.O. Bhopal), Indore, which direction is reproduced below :-- " He is directed to deduct erroneous ad hoc deductions allowed under column 19 and issue a revised 16A(5) after giving necessary opportunity to the assessee. " The assessee was communicated of the above and the assessee objected to the withdrawal of deductions was allowed within the jurisdiction of the V.O. and that there was no bar on such deductions. The assessee also objected that allowing of deductions do not result in a mistake ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cular manner. Thus it is an obvious fact that the Act does not provide any authority under the Act, to issue any directions in the manner of making of any assessment in a particular case. Therefore, it can be concluded that the V.O.'s order dated 3.2.1986 made as per the directions of the Superintending Engineer is obviously not an order envisaged u/s 16A(5) read with sec. 35(1)(aaa) and 35(6A) and, therefore, is an illegal one. Since the WTO did not act on this report of the V.O., this observation is effective to in the context of legality only. 14.10 The second in sequence is the Chief Engineer (Valuation) observation and direction dated 10.2.1986. We have reproduced in para 7, the contents of the directions of the Chief Engineer. 'Our observations made in paras 14, 14.3 to 14.9' 'would equally apply to the directions of the Chief Engineer dated 10.2.1986, especially to its invalidity and illegality, for the Chief Engineer had no jurisdiction or power under the Act to issue any direction to the Valuation Officer in the manner of making of valuation of the property and the deductions that are permissible.' The Chief Engineer had laid heavy emphasis on the value of land to be inc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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