Income Tax Appellate Tribunal - Mumbai
Surat Cotton Spg. And Wvg. Mills (P.) ... vs Dy. Commissioner Of Income-Tax on 8 January, 1992
Equivalent citations: [1992]41ITD458(MUM)
ORDER
G.E. Veerahhadrappa, Accountant Member
1. This appeal by the assessee is directed against the order dated 31-1-1990 of the Commissioner of Wealth-tax (Appeals) for the assessment year 1984-85.
2. The assessee is a company. For the assessment year 1984-85, its relevant valuation date is 31-3-1984.
3. As regards motor cars, the assessee declared the value of such cars at Rs. 18,50,000. This was based on the report of approved valuer dated 4-2-1985 and the same was claimed to have been done by replacement cost method of valuation. According to the Assessing Officer, the insured value of the cars with the insurance company represented their reasonable market value. He, therefore, took their insured value at Rs. 23,60,000 as the assessable value and added the difference of Rs. 5,10,000 to the net wealth returned by the assessee. As regards the immovable property, the assessee returned the value as follows :-
(1) Mangalam (Dumas) Property Rs. 8,48,000
(2) Staff quarters in Surat Cotton Mills Compound Rs. 9,46,000
(3) Altamount Property Rs. 4,44,500
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Rs. 22,38,500
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The above value was worked out under Rule 1B B based on the report of the approved valuer as these properties were claimed to be used as residential properties. The Deputy Commissioner rejected the values returned as, according to him, that basis under Rule 1BB could not give correct results as the value of the same went below the cost price of the property. Accordingly, rejecting the assessee's valuation, he adopted the value of the property at Rs. 12,50,000, Rs. 14,10,000 and Rs. 14,50,000 respectively. Besides the above, the Dy. Commissioner found that the assessee had a right as a member of a condominium over three flats and another building where it owns servant quarter and these values were not included in the net wealth. The contention of the assessee was that the flats and rights in structures were not being in the nature of building and land as mentioned in Section 40(3)(vi) of Finance Act, 1983. Accordingly, the assessee filed the valuation report dated 18-3-1989 from H. Ganjawala & Co. and declared the value of three unsold flats in the high rise building named Shandced at Altamount Road as under applying rule IBB of the Wealth tax Rules :-
Flat No. Built up area Value
Rs.
701 237 sq.mtrs. 5,41,500
702 (Duplex) 344.57 sq.mtrs. 2,53,500
801 237 sq.mtrs. 5,41,500
The Dy. Commissioner has rejected the working under Rule 1BB and worked out the value of these flats as provided in Section 40(3) of the Finance Act, 1983. While so doing, he kept in mind the sale price of nine out of the 12 flats, which were sold, and the resultant profits declared in the income-tax assessment. In this manner, the value of the flats was arrived at Rs. 1,52,00,000 and added to the net wealth of the assessee. The value of the servant quarter was estimated at Rs. 25,000. The assessee disputed the valuation as was done by the Assessing Officer. It was contended before the first appellate authority that the Dy. Commissioner was unjustified in rejecting the reports of the valuers and in working out the value of the different properties and the motor cars one estimate with out any basis. It was also contended that he erred in rejecting the Rule 1BB of the Wealth tax Rules in connection with the value of the immovable properties. As regards the motor cars, it was urged that the insured value did not represent their market value. In view of these fads, the Commissioner of Wealth-tax (Appeals) felt that ends of justice would be met if the Assessing Officer refers the matter to the Departmental Valuation Officer for valuation, both in respect of immovable property and motor cars owned by the assessee. Accordingly, she set aside the assessment to the file of the Dy. Commissioner with direction to refer the valuation to the Departmental Valuation Officer. Against this order, the assessee is now before us.
4. Relying upon the decision of the Madhya Pradesh High Court in M.V. Kibe v. CWT [1987] 168 ITR 82, it was submitted that an appellate authority cannot direct the Wealth-tax Officer to refer the valuation under Section 16A of the Wealth-tax Act. Reference was also made to the decision of the Tribunal in Rattan Chand & Sons v. WTO [1983] 5 ITD 508 (Chd.) to the same proposition of law. The assessee also relied on his paper book containing 77 pages in support, of his contention and urged that the order of the CWT (Appeals) on the issue be set aside and it was argued that the Assessing Officer be suitably directed to accept the assessee's returned value.
5. The departmental representative, on the other hand, assailed the contentions of the assessee. He relied upon the decision of the Calcutta High Court in Raja Baldeodas Birla Santaiikosh v. CWT [1991] 189 ITR 613, in support of his contention that the appellate authority is entitled to refer the question of valuation to the Valuation Officer under Section 16A of the Wealth-tax Act, 1957. Drawing our attention to the provisions of Section 23(3A)(b) and Section 23(4)(6), it was argued that it was within the powers of the appellate authority in disposing of an appeal to seek such references or directing in seeking of such references to the Valuation Officer.
6. We have carefully perused the records and also considered the rival submissions. The determination of the valuation of any asset is entirely a matter of procedure and that can be done at any stage of the proceeding inasmuch as the appeal is a continuation of the original proceedings. In an appeal, the appellate authority can confirm the order of assessment, annul the same or remand the case for making a fresh assessment in the light of the observation made by it. The powers of the appellate authority are co-extensive with that of the assessing authority. In our view, the CWT (Appeals) has not erred in law in directing the Wealth-tax Officer to seek the valuation of the disputed properties, in the facts and circumstances of the case. The Calcutta High Court in Raja Baldeodas Birla Santatikosh's case (supra) have upheld such actions of the appellate authority. In Guduthur Bros. v. ITO [1960] 40 ITR 298, the Supreme Court held that an appellate authority can do what the tax officer can do and can also direct him to do what he had failed to do. It was also held by the Supreme Court in CIT v. Kanpur Coal Syndicate [1964] 53 ITR 225 that an appellate authority can direct the tax officer where he has an option to assess, in what manner such option should be exercised. The powers of the appellate authority are wide to do justice to the assessee and also to protect the interest of the revenue. He may remand the case to the Income-tax Officer to do afresh. The appellate authority has jurisdiction as well as the duty to correct all errors in the proceedings. He has to issue, if necessary, appropriate directions to the authority against whose decision the appeal is preferred to dispose of the whole or any part of the matter afresh, unless forbidden from doing so by statute - Kapurchand Shrimal v. CIT [1981] 131 ITR 451 (SC). In our view, the order of the Commissioner of Wealth-tax (Appeals) docs not require any interference. We confirm the same.
7. In the result, appeal is dismissed.