TMI Blog1991 (4) TMI 9X X X X Extracts X X X X X X X X Extracts X X X X ..... d. The assessee was granted a tax clearance certificate for the proposed sale of the property. On the basis of this fact, the Commissioner of Wealth-tax found that the assessments completed by the Wealth-tax Officer for the assessment years 1977-78 to 1980-81 were erroneous as these were prejudicial to the interests of the Revenue, and, consequently, he issued show cause notices to the assessee. The contention of the assessee, inter alia, before the Commissioner of Wealth-tax was that on the basis of the subsequent facts, the Commissioner of Wealth-tax could not come to the conclusion that the assessments made by the Wealth-tax Officer were erroneous. It was also indicated that the property no doubt was sold for Rs. 45 lakhs, but the same was under the Acquisition Scheme of CMDA for long for the purpose of the widening of Wood Street. It was also indicated that there was another restriction on the property. This property could not be sold to anyone other than any institution. The Commissioner of Wealth-tax, after considering the contentions of the assessee, found that the orders passed by the Wealth-tax Officer were erroneous and prejudicial to the interests of the Revenue and, acc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the property was sold for Rs. 45 lakhs. The value of the property had been shown at about Rs. 60,000 in each year. The property had open land of more than 1 bigha and there was a super-structure on it. The Wealth-tax Officer did not apply his mind and made the assessments as submitted by the assessee. Under the above circumstances, when the Wealth-tax Officer had not applied his mind, the orders passed by the Wealth-tax Officer were erroneous. The Departmental representative supported his argument. He also objected to all other arguments of the assessee and urged that once the Wealth-tax Officer did not apply his mind to the facts of the case, all other arguments of the assessee were not tenable. Accordingly, he urged that the order of the Commissioner should be maintained. The Tribunal on the first and second contentions of the assessee came to the conclusion that the Commissioner did not indicate any material to show that the orders passed by the Wealth-tax Officer were erroneous. The third objection of the assessee that, for the purpose of determining the market value, the provisions of section 7(1) of the Act read with rule IBB were to be considered. It was a residential b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment years in question is erroneous and, accordingly, the Commissioner was justified in revising the assessments in terms of section 25(2) of the Act. He has relied on several decisions in support of his contentions, namely, Avtar Singh Sandhu v. WTO [1981] 129 ITR 531 (Delhi), Dr. Keki Hormusji Gharda v. B. H. Raisinghani, WTO [1982] 135 ITR 386 (Bom), CWT v. Chhatrshal Sinhji D. Zala [1982] 135 ITR 826 (Guj) and Addl. CIT v. Mukur Corporation [1978] 111 ITR 312 (Guj). Mr. Sanjay Bhattacharjee, learned counsel appearing for the assessee, has contended firstly that the Commissioner could not have taken into account the sale of the property at Rs. 45 lakhs which is a subsequent event inasmuch as this fact was not and could not have been before the Wealth-tax Officer at the time of the original assessment ; in other words, it did not form part of the records. Accordingly, the Commissioner did not have any jurisdiction to look into the subsequent materials. He has relied on a decision of the Allahabad High Court in CWT v. Raj Narain Pratap Narain (HUF) [1989] 177 ITR 34. On merits, he contended that, even if it was sold at a higher price, since it was a tenanted property, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... us so as to give power to the Commissioner under section 25(2) of the Wealth-tax Act. Hence the assessee succeeds on this ground. This view of the Tribunal, in our opinion, cannot be said to be erroneous on the facts of this case. The Tribunal also took into account the fact that rule IBB of the Wealth-tax Rules, despite having come into force in 1979-80, was applicable to any pending assessments. If the value of the property is determined with reference to rule IBB, then the value would not exceed the value which had already been declared by the assessee. The Tribunal accepted this position and there was no dispute that 9, Wood Street property, was a residential building during the years under consideration and, therefore, the value was to be determined by applying rule 1BB of the Wealth-tax Rules. The Tribunal found that " if the municipal rent on the basis of the annual value is determined and the same was capitalised at twelve and a half times the value would not exceed the amount which had already been shown by the assessee ". This finding has not been challenged. The Tribunal took another fact into account, viz., that the property was let out during the assessment year 19 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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