TMI Blog1995 (3) TMI 41X X X X Extracts X X X X X X X X Extracts X X X X ..... he Inspecting Assistant Commissioner (Assessment) under section 25(2) of the Wealth-tax Act, 1957 ?" The brief facts of the case are that the assessment of the assessee under the Wealth-tax Act were finalised by the Inspecting Assistant Commissioner (Assessment). The Inspecting Assistant Commissioner (Assessment) included the amount of capital standing to the credit of the assessee in the books of the firm, Messrs. Surana Enterprises, which owned a cinema building known as "Raj Mandir Cinema", of which the assessee was a partner. In the assessment order framed by the Inspecting Assistant Commissioner (Assessment), he took the value of the said building without applying the provisions of rule 2 of the Wealth-tax Rules, 1957. The Commission ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itute the Inspecting Assistant Commissioner of Wealth-tax in place of the Wealth-tax Officer and, therefore, under section 25(2), the Commissioner of Wealth-tax is competent to review the order of the Inspecting Assistant Commissioner. The appeal of the assessee was dismissed. Mr. T. C. Jain, learned counsel on behalf of the assessee, has submitted that the Tribunal has observed that the order passed by the Commissioner of Wealth-tax are bereft of any details. Neither has he mentioned the value of Raj Mandir Cinema as per the balance-sheet nor has he referred to the value which according to him should have been adopted. The orders passed by the Commissioner were considered to be vague and non-speaking. It is submitted that once this obser ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... once such power is exercised under sub-section (1), reference to the Wealth-tax Officer under section 25(2) has to be construed as to the Inspecting Assistant Commissioner of Wealth-tax in accordance with the provisions of section 8AA(4) of the Act. The contention that the order of the Inspecting Assistant Commissioner (Assessment) cannot be revised by the Commissioner of Wealth-tax, therefore, has no substance. The other submission of learned counsel for the assessee is that since the order was vague and non-speaking, therefore, it should have been set aside by the Tribunal. We are of the view that this contention has also no force because what the Commissioner of Wealth-tax has found in the present case is that when the assessments were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on is of no assistance to learned counsel for the assessee. It was observed in this case that the error envisaged by section 263 was not one which depended on possibility or guess work, but it should be actually an error either of fact or of law. The Commissioner of Income-tax categorically said that the speculative business could not qualify for deduction, much less exemption under section 11, it cannot be said that there was any error in the order of the Income-tax Officer relating to the assessment year 1971-72. The judgment relied on by learned counsel for the assessee is not on the proposition that even if the mistake of law is committed, the order cannot be revised. Conversely it supports the view of the Revenue that if there is an er ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... prejudicial to the interests of the Revenue. The word "erroneous" is comprehensive enough to include such an order which is prejudicial to the interests of the Revenue. An error which mav be of fact or law as is evident from the record could confer jurisdiction on the Commissioner under section 25(2). In the present case, the dispute is with regard to nonapplication of the provisions of rule 2(1) of the Wealth-tax Rules while determining the value of the partner's share in the firm. Besides the provisions in the rule itself, the apex court in the case of Bharat Hari Singhania v. CWT [1994] 207 ITR 1 has held that the provisions of rule 1D are mandatory. The error of law, therefore, will make an order passed by the Inspecting Assistant Comm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed hereunder. The net wealth of the firm or association on the valuation date shall be first determined. That portion of the net wealth of the firm as is equal to the amount of its capital shall be allotted among the partners or members in the proportion in which capital has been contributed by them. The determination of the market value of an asset of firm cannot be at a figure lesser than shown in the balance-sheet. The exercise of the power by the Commissioner under section 25(2) is in accordance with law and the order passed by the assessing authority was prejudicial to the interests of the Revenue as well. In these circumstances, we are of the opinion that the Tribunal was justified in holding that the Commissioner of Wealth-tax has ..... X X X X Extracts X X X X X X X X Extracts X X X X
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