TMI Blog1963 (9) TMI 66X X X X Extracts X X X X X X X X Extracts X X X X ..... s of the town of Tuticorin. For the assessment year 1957-58 he valued these properties at ₹ 51,270 on the basis of an estimate of valuation prepared by a retired municipal engineer. The Wealth-tax Officer did not accept this valuation as correct and valued the properties at ₹ 81,620. This figure was arrived at by multiplying the net annual letting value of the premises, which was ₹ 4,081, into twenty times. Apparently this mode of valuation, viz., twenty times the net annual letting value, was adopted having regard to the circular of the Central Board of Revenue to which we shall refer a little later. The assessee preferred an appeal to the Appellate Assistant Commissioner but failed. There was no further appeal to the Inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... brings to tax the net wealth of every individual and Hindu undivided family at the rate specified in the Schedule for every financial year commencing on and from the first day of April, 1957. The tax base is the net wealth on the corresponding valuation date. Valuation date is defined under section 2(q) of the Act as meaning the last day of the previous year as defined in clause (II) of section 2 of the Income-tax Act if an assessment were to be made under that Act for that year. Net wealth is defined under section 2(m) as meaning the amount by which the aggregate value, computed in accordance with the provisions of the Act, of all the assets, wherever located, belonging to the assessee on the valuation date, etc. Section 7, sub-sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... data he can estimate the value of the buildings in respect of which he has to assess the wealth-tax. However wide the discretion of the officer may be in making the estimate, it has to be remembered that the approach should be judicial. It would not be open to him to say arbitrarily that the valuation is so much. Nor should he follow blindly any fixed rule like multiplying the net annual letting value by twenty times. It is true that he is bound by the Central Board circular. But he has to apply it not as a general formula in every case without making any serious attempt to discharge the statutory functions which require the determination of the market value. The Central Board Circular is as follows: C.B.R. Circular No. 3 W.T. of 1957 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e adopted in preference to every other mode of valuation. We are of opinion that the department has not truly understood the scope of the circular of the Central Board. There seems to be a popular departmental misconception that wherever the assessee's mode of valuation is not to be accepted the wooden rule of twenty times the net annual letting value should be adopted. This procedure, it need hardly be pointed out, would contravene the provisions of section 7 of the Act which compels the assessing authority to determine the value only as the price which the asset, if sold on the valuation date, would have fetched in the open market. Further, the twenty years rule is not inflexible. It may be fifteen years or thirty years. In this case, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that is certainly not a ground why the department should not arrive at the true value. The task of estimating the value may often times be difficult. To quote the words of Viscount Simon in Gold Coast Selection Trust Limited v. Humphrey [1948] 2 All E.R. 379, 384; [1948] A.C. 459, 473: Valuation is an art, not an exact science. Mathematical certainty is not demanded, nor indeed is it possible. It is for the commissioners to express in the money value attributed by them to the asset their estimate, and this is a conclusion of fact to be drawn from the evidence before them. The estimate must be, as far as possible, reasonably approximate to the market value and should not be wide of the mark. It seems to us that the department in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sion of the valuers: Provided that if there is a difference of opinion between the two valuers, the matter shall be referred to a third valuer nominated by agreement, or failing agreement, by the Appellate Tribunal, and the decision of that valuer on the question of valuation shall be final. The Tribunal is bound to refer the question of valuation to two arbitrators, if the appellant before it so requires. But, if the appellant does not so require, the Tribunal has a discretion to refer the matter to two valuers. The Tribunal observes in its present order that the assessee was not prepared to have the question of dispute referred to arbitration. We understand this to mean that the appellant (assessee) was not willing to nominate h ..... X X X X Extracts X X X X X X X X Extracts X X X X
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