TMI Blog2003 (3) TMI 303X X X X Extracts X X X X X X X X Extracts X X X X ..... fteen in number, are against the combined order of the learned CWT(A), dt. 28th Jan., 2002, for asst. yrs. 1977-78 to 1990-91 and 1993-94. Since the issues involved in all these appeals and cross-objections are common or inter-connected, they are being disposed off by this consolidated order. 2. In the Departmental appeals (WTA. Nos. 14 to 26/Rjt/1997), the following common ground is taken. The learned CWT(A) II, Rajkot, has erred in law and on facts in set-asiding the order of the WTO" (sic) 3. In the cross-objections of the assessee (C.O. Nos. 5 to 17/Rjt/2002), following common grounds are taken. (1) The learned CIT(A) has erred on facts and in law in setting aside the assessment only on the limited issue of market value of Pratap Villas Palace. (2) The learned CIT(A) has erred on facts and in law that, ".......it will be open to him to invoke r. 8(a) of Sch. III and determine the market value of the property in accordance with r. 20(2) of the Schedule" 4. In the assessee's appeals arising out of CWT(A)'s order dt. 28th Jan., 2002, (WTA Nos. 5 to19/Rjt/2002), the only ground taken is as follows: The learned CIT(A) has erred on facts and in law in upholding AO's act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in any of these reports including those of the authorized valuers or in the returns of wealth that property was tenanted. It was only during the proceedings under s. 16A(5) for asst. yrs. 1982-83 to 1985-86 that the assessee for the first time argued that the property was tenanted fetching a rent of Rs. 1,000 per month since 1957 and hence value should be determined as per rent capitalization method. DVO rejected this contention on the ground that rent was collusive and also that the property was not in a habitable condition on account of various reasons. 7. The contention of the assessee before the CWT(A) was that the property should be valued as per r. 3 of Sch. III to the WT Act, 1957 (the Act) since these were procedural laws and hence applied to all pending proceedings. The CWT(A) agreed with this general contention of the assessee. However, according to him, r. 8(a) would be applicable as the rent was collusively understated. According to him, the underlying presumption in r. 5, which defined "gross maintainable rent" was that the rents fixed by the landlord and tenant would be bona fide transactions. On the facts of the case on hand, CWT(A) observed that the rent arrangeme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pact on the ultimate outcome of the appeals. Moreover, considering the entire sequence of events and the reason mentioned in the condonation petition, the assessee is aggrieved against the later order of the CWT(A) only and not against the earlier. Therefore, considering all these aspects of the matter, we do not condone the delay in filing the cross-objections and dismiss them in limine. 9. On merits, it was submitted by the learned Departmental Representative that Sch. III was not applicable to assessments prior to 1st April, 1989 and hence the matter was rightly referred to the DVO. It was submitted that the rent fixed for the impugned property was a collusive arrangement and, in fact, was only a paper arrangement. He strongly supported the orders of the lower authorities. The learned Departmental Representative relied on the decisions of the Supreme Court in the case of McDowell Co. Ltd. vs. CWT (1985) 47 CTR (SC) 126 : (1985) 154 ITR 148 (SC), in the case of Workmen of Associated Rubber Industry Ltd. vs. Associated Rubber Industry Ltd. (1985) 48 CTR (SC) 355 : (1986) 157 ITR 77 (SC) and in the case of CIT vs. B.M. Kharwar (1969) 72 ITR 603 (SC). 10. The submissions of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s impracticable to value the property as per rent capitalization method. Rule 8(a) has been invoked on the ground that the rent is collusive. To say that rent is collusive does not amount to saying that it is not practicable to apply r. 3. The words "not practicable" have to be construed as meaning as "not proper or feasible" and not that the valuation is not "reasonable or fair". This view has been expressed by the Gujarat High Court in the case of Hasanand Pinjomal vs. CIT 1977 CTR (Guj) 486 : (1978) 112 ITR 134 (Guj), although, in the context of r. 6DD(i) of IT Rules. But the Calcutta Bench of the Tribunal has succinctly interpreted this phraseology in the case of Arbinda Mitra vs. Asstt. CWT (1997) 59 ITD 609 (Cal) and this decision was relied upon by the assessee before the CWT(A) in the second round of litigation. We reproduce the relevant observations of the Tribunal below which are found at p. 614 of 59 ITD: "The word 'practicable' means and specifies that which is feasible or practicable of being put to practice within the available means and resource, In other words, when the AO is of the opinion that there is insurmountable difficulty in computing the value as per rent ..... X X X X Extracts X X X X X X X X Extracts X X X X
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