COMMISSIONER OF WEALTH TAX Vs. NIRANJAN NAROTTAM
LAWS(GJH)-1988-7-15
HIGH COURT OF GUJARAT
Decided on July 18,1988

COMMISSIONER OF WEALTH TAX Appellant
VERSUS
Niranjan Narottam Respondents


Cited Judgements :-

COMMISSIONER OF WEALTH TAX VS. SUSHILA AGRAWAL [LAWS(PAT)-1996-4-24] [REFERRED TO]
COMMISSIONER OF WEALTH TAX VS. JYOTSANA BAID [LAWS(RAJ)-1993-11-42] [REFERRED TO]
COMMISSIONER OF WEALTH TAX VS. HRUDAYESH B PATEL [LAWS(GJH)-1998-5-32] [REFERRED TO]
GULABRAI HANUMANBOX VS. COMMISSIONER OF WEALTH TAX [LAWS(GAU)-1991-8-2] [REFERRED TO (GUJ) : TC63R.764 CONCURRED WITH.]
COMMISSIONER OF WEALTH TAX VS. R K INDERJEET SINGH [LAWS(RAJ)-1995-11-30] [REFERRED TO]
COMMISSIONER OF WEALTH TAX VS. PATWANT KAUR [LAWS(P&H)-2004-7-139] [REFERRED TO]
MAHINDER KUMAR GUPTA VS. UNION OF INDIA MINISTRY OF PETROLEUM AND NATURAL GAS [LAWS(SC)-1994-9-144] [REFERRED TO]
COMMISSIONER OF WEALTH TAX VS. TANDON O P [LAWS(DLH)-1991-12-57] [REFERRED TO]
COMMISSIONER OF WEALTH TAX VS. HIRA LAL MEHRA [LAWS(P&H)-1997-7-207] [REFERRED TO]
COMMISSIONER OF INCOME TAX (C) KANPUR VS. LATE SHRI PADAMPAT SINGHANIA THROUGH L/H DR. G.H. SINGHANIA [LAWS(ALL)-2016-11-26] [REFERRED TO]


JUDGEMENT

R.C.MANKAD,J. - (1.)THE assessee is an individual. He owns a bungalow known as 'Shalimar' situate in Shahibag, Ahmedabad. The assessee disclosed the value of the bungalow at Rs. 3,95,260 in this return of wealth for the assessment year 1975 -76. The assessee contended before the Wealth -tax Officer that the bungalow which was exclusively used by him for residential purpose throughout the period of twelve months immediately preceding the valuation date, that is March 31, 1975, which is relevant to the assessment year 1975 -76, should be valued as provided in section 7(4) of the Wealth -tax Act, 1957. The assessee contended that the value of the bungalow on the valuation date relevant to the assessment year 1971 -72, that is March 31, 1971, should be adopted as its value on the valuation date, March 31, 1975. The Wealth -tax Officer however, rejected the assessee's contention and valued the bungalow at Rs. 15,48,600 for the assessment year 1975 -76. We are not concerned with the other assets of the assessee in this reference and, therefore, we have not considered it necessary to mention them.
(2.)BEING aggrieved by the assessment order passed by the Wealth -tax Officer for the assessment year 1975 -76, the assessee carried the matter in appeal before the Commissioner of Wealth -tax (Appeals) (hereinafter referred to as the 'Commissioner'). The Commissioner and, while disposing of the assessee's appeals for the proceeding years 1967 -68 to 1974 -75, by a common order dated July 14, 1982, accepted the assessee's contention that the provisions of section 7(4) of the Act would be applicable to the assessment years prior to the assessment year 1976 -77, and the value of the bungalow to be adopted for the purpose of assessment for the assessment years 1972 -73, 1973 - 74 and 1974 -75, would be the market value of the bungalow as on the valuation date relevant to assessment year 1971 -72 which according to him was Rs. 4,46,600. He, therefore, directed the Wealth -tax Officer to adopt the value of the bungalow at Rs. 6,46,600 for the assessment years 1972 -73, 1973 -74 and 1974 -75. The Commissioner, following his said decision, by his order dated January 13, 1983, directed the Wealth -tax Officer to adopted the value of the bungalow at Rs. 6,46,600 for the assessment year under reference, that is the assessment year 1975 -76 also under section 7(4) of the Act.
Being aggrieved by the valuation of the bungalow adopted by the Commissioner, the Revenue carried the matter in appeal before the Income -tax Appellate Tribunal, Ahmedabad Bench. It was contended on behalf of the Revenue before the Special Bench of the said Tribunal that section 7(4) of the Act, which was inserted by section 27(3) (b) of the Finance Act, 1976, was effective prospectively from the assessment year 1976 -77 onwards. Section 27(3) of the Finance Act, 1976, did not indicate the date from which the provisions contained in section 7(4) of the Act were to come into operation and, therefore, as provided in section 1(2) of the Finance Act, 1976, it would come into operation from April 1, 1976. Therefore, contended the Revenue, section 7(4) would come into force or operation with effect from April 1, 1976, and consequently it would apply only from the assessment year 1976 -77. It was contended that section 7(4) cannot be given retrospective effect as was done by the Commissioner. The Commissioner, it was submitted, gave retrospective effect to section 7(4) of applying it to the assessment proceedings for the assessment years subsequent to 1971 -72, which were pending. On the other hand, it was contended on behalf of the assessee that section 7(4) was procedural and, therefore, it applied retrospectively in the sense that it would apply to all pending assessment proceedings for the assessment years subsequent to the assessment year 1971 -72. The Tribunal, by its order, however, held that section 7(4) was a procedural provision and not a substantive provision of law and, therefore, it applied retrospectively to all the pending assessment proceedings. In the view which it took, the Tribunal confirmed the order of the Commissioner and dismissed the Revenue's appeal.

(3.)IT is in the background of the above facts that the Tribunal has, under section 27(1) of the Act, referred to us for our opinion the following question of law :
'Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in law and on facts in holding that the valuation of the property 'Shalimar' was required to be made by applying the provisions of section 7(4) of the Wealth -tax Act, 1957 ?'

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