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TMI Blog1991 (12) TMI 14X X X X Extracts X X X X X X X X Extracts X X X X ..... and their values returned were as follows: Name of the property Value returned for the assessment years (Rs.) 86/1, Suren Sarkar Road 56,400 4, Ram Mohan Roy Road 38,500 34 and 34A, Motilal Basak Lane 1,15,000 The Wealth-tax Officer later noticed that the Valuation Officer had determined the value of those properties differently as mentioned below: Name of the Property Assessment years 1972-73 1973-74 1974-75 1975-76 (Rs.) (Rs.) (Rs.) (Rs.) (i) 86/1, Suren Sarkar Road 1,16,500 1,16,500 1,16,500 1,16,500 (ii) 4, Ram Mohan Roy Road - 53,500 60,500 58,000 (iii) 34 and 34A, Motilal Basak Lane - 1,44,000 1,49,000 1,41,000 Out of the said properties, the property at 86/1, Suren Sarkar Road, was leased out for n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and (3) of section 7 placing reliance upon the judgment of the Delhi High Court in the case of Sharbati Devi Jhalani v. CWT [1986] 159 ITR 549 and reached the conclusion that rule 1BB of the Wealth-tax Rules, though mandatory, is not binding upon the Valuation Officer and, therefore, there was no error in the valuation made by the Valuation Officer though not in accordance with rule 1BB. On these facts, the Tribunal has referred the following question : " Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the Valuation Officer was not bound by rule 1BB of the Wealth-tax Rules, 1957, and thereby to follow the rental method of valuation of the tenanted properties ? " At the hearing befo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... herwise not. According to the Tribunal, once the question of valuation is referred to the Valuation Officer under section 16A of the Act, the latter is free of the mandatory rules for valuation and can apply any method at his free will and pleasure. Such a situation cannot be said to be conceivable under the law. Where the statute itself fixes a method of valuation as the statutory method, that method shall have its authoritative and statutory force for all Officers under the Act-the Assessing Officer, the Appellate Officer or the Appellate Tribunal or the Departmental Valuation Officer. Rule 1BB has taken its shape as a mandatory method of valuation through a process of evolution of judicial opinion on valuation of immovable properties. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er the applicability of the statutory Rules while entertaining the reference made by the Wealth-tax Officer. The Gujarat High Court in CWT v. Kasturbhai Mayabhai [1987] 164 ITR 107 (Guj), has held that once a reference is made to the Valuation Officer, the asset has to be valued in accordance with section 7(3) or section 7(4), as the case may be. While valuing the assets under section 7(3) or section 7(4) read with section 16A(1) and 16A(5), the Valuation Officer must have regard to the well recognised methods of valuation. Rule 1BB merely introduced one such method with suitable modifications so that it can govern practically all cases of assets used wholly or mainly for residence. It would, therefore, not be inconsistent with the scheme o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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