The Commissioner Of Income-Taxchennai v. Mr.m.parthasarathy Huf

IN THE HIGH COURT OF JUDICATURE AT MADRAS THE HONOURABLE MR.JUSTICE T.S.SIVAGNANAMand THE HONOURABLE MRS.JUSTICE V.BHAVANI SUBBAROYAN Tax Case (Appeal) No.1008 of 2008 The Commissioner of Income-taxChennai. ... Appellant -vs- Mr.M.Parthasarathy HUF,45, First Avenue,Shastri Nagar, Adyar,Chennai-600 020. ... Respondent Tax Case (Appeal) filed under Section 27-A of the Wealth TaxAct, 1957 against the order of the Income-tax AppellateTribunal,“A”Bench,Chennaidated05.08.2005inW.T.A.No.9/Mds/2004 for the assessment year 1995-96 against theorder of the Commissioner of Wealth Tax (Appeals)VIII Chennaidated 20.10.2003 and made in WT/Appeal No.1/2003-2004 for theAssessment year 1995-1996. Against the order of the Assistant Commissioner of WealthTaxx Circle IV, Chennai 34 dated 26.03.2003 and made in PAN/GIRNo. 2207 for the Assessment year 1995-1996.For Appellant:Mr.T.R.Senthil Kumar,Senior Standing Counselassisted by Mrs.K.G.Usha Rani,Junior Standing CounselFor Respondent :Mr.R.Venkat Narayananfor M/s.Subbaraya Aiyar JUDGMENT[Delivered by T.S.Sivagnanam, J.] This appeal, by the Revenue, is directed against the orderpassed by Income-tax Appellate Tribunal, “A” Bench, Chennaidated 05.08.2005 in W.T.A.No.9/Mds/2004 for the assessment year1995-96. 2.This appeal has been admitted on 30.07.2018 on thefollowing substantial questions of law:- https://hcservices.ecourts.gov.in/hcservices/ “(i) Whether or not, when the differencebetween the unbuilt area and the specified areaexceeds 20% of the aggregate area, the assessingofficer is bound to follow Rule 3 of Schedule IIIof the Wealth Tax Act for the valuation of theimmovable property? (ii) When the difference between unbuilt areaand specified area exceeds 20% of the aggregatearea, would not it be with the discretion of theassessing officer to compute valuation of theproperty under Rule 20 of the Schedule III of theWealth Tax Act?” 3.We have heard Mr.T.R.Senthil Kumar, learned SeniorStanding Counsel appearing for the appellant/Revenue andMr.Venkat Narayanan, learned counsel for the respondent/assessee. 4.The learned Senior Standing Counsel appearing for theappellant submitted that there is no dispute as regards thelegal position regarding the applicability of Schedule III withregard to valuation of the property for the purposes of theassessment under the Wealth-tax Act. However, the Tribunal didnot decide as to whether Rule 20 of III Schedule to the Wealth-tax Act will be applicable as against the finding of theCommissioner of Wealth Tax or that Rule 3 of III Schedule to theWealth-tax Act is applicable. 5.We find that a specific ground has been canvassed by theRevenue before the Tribunal, but the Tribunal has not dealt withthe same. 6.The learned Senior Standing Counsel for the Revenue placedreliance on the decision of the Division Bench of this Court inthe case of Commissioner of Wealth-tax vs. VGP Housing (P) Ltd.([2009] 176 Taxman 273), wherein somewhat identical issue arosefor consideration and the grievance of the Revenue was that theTribunal had given only a specific direction to the AssessingOfficer to apply only Rules 3, 4 and 5 and the Division Benchheld that there was no restriction for the Assessing Officer toapply the relevant Rules for determining the value of theimmovable property and hence, the apprehension of the Revenuehad no basis. It was made clear that it is for the AssessingOfficer to apply Rules 3, 4 and 5 and if he feels the same wasnot practicable to apply, he is at liberty to invoke Rule 8 or20 and determine the value of assets in accordance with ScheduleIII of the Wealth-tax Act. The operative portion of thejudgment reads as follows:- “8.The apprehension of the revenue is thatthe Tribunal had given only a specific directionto the Assessing Officer to apply only rules 3,5 and 5. On a complete reading of Schedule III,the irresistible conclusion is that thethe Tribunal had given only a specific directionto the Assessing Officer to apply only rules 3,5 and 5. On a complete reading of Schedule III,the irresistible conclusion is that the Assessing Officer should consider and applyrules 3, 4 and 5, and if he is of the opinionthat it is not practicable to apply the rules 3,4 and 5, he could rely on rule 8 or rule 20 andthe value of the property could be determined inthe manner laid down under rule 8 or rule 20.Hence, there is no restriction for the AssessingOfficer to apply the relevant rules for deter-mining the value of the immovable property andhence the apprehension of the revenue has nobasis and it is an imaginary one. We make itclear that it is for the Assessing Officer toapply first the rules 3, 4 and 5 and if he feelsthe same is not practicable to apply, he is atliberty to invoke rule 8 or rule 20 anddetermine the value of the assets in accordancewith Schedule III of the Wealth-tax Act.” 7.On a reading of the order passed by the Tribunal, we findthat the specific issue raised by the Revenue has not been dealtwith by the Tribunal. Therefore, we deem it fit and proper toremand the matter for fresh consideration. 8.Accordingly, the appeal is allowed, the impugned order isset aside and the matter is remanded to the Tribunal for freshdecision to decide as to whether Rule 20 of III Schedule to theWealth-tax Act will be applicable as canvassed by the Revenue. 9.In the light of the above order, there will be nonecessity to decide the substantial questions of law framed inthis appeal. Accordingly, the appeal is allowed with the abovedirection. No costs. Consequently, connected miscellaneouspetition is closed. abrTo 1.The Income-tax Appellate Tribunal, “A” Bench, Chennai. 2.The Commissioner of Income-tax Chennai. SV(CO)SP(26/09/2018) https://hcservices.ecourts.gov.in/hcservices/