R.K.Agrawal, J. - (1.) The Income-tax Appellate Tribunal, Delhi, has referred the following two questions of law under Section 27(3) of the Wealth-tax Act, 1957, hereinafter referred to as "the Act", for the opinion to this court : "1. Whether on the facts and in the circumstances of the case, the hon'ble Tribunal was correct in law in its finding that the assessment order of the Wealth-tax Officer for year under consideration passed on March 27, 1979, after the receipt of the Valuation Officer's report was not erroneous insofar as it was prejudicial to the interest of the Revenue ? 2. Whether on the facts and in the circumstances of the case, the hon'ble Tribunal has not misdirected itself in basing its finding that the Valuation Officer's report under Section 16A not being in respect of the year under consideration, the Commissioner was not correct in considering the value of the immovable properties as on March 31, 1971, worked out therein as the basis for holding that the value adopted by the Wealth-tax Officer did not reflect the fair market value of the property within the meaning of Section 7(1) of the Wealth-tax Act ?"
(2.) Briefly stated the facts giving rise to the present reference are as follows :
(3.) The reference relates to the assessment year 1971-72. The valuation date is March 31, 1971. In the assessment of the respondent for the year under consideration the net wealth included the value of immovable properties owned by the respondent located at New Delhi, which was disclosed at Rs. 3,42,918 being half of the value of the said property as per the approved valuer's report. The valuation of the said property was also referred under Section 16A of the Act by the Wealth-tax Officer to the Valuation Officer in regard to the subsequent assessment years, namely, 1972-73 to 1976-77. The Valuation Officer had worked out the value of the property as on March 31, 1971, at Rs. 24,87,460. After the receipt of the said valuation report, the Wealth-tax Officer, however, framed the wealth tax assessment on March 27, 1979, taking the valuation of this property at Rs. 3,42,918. The Commissioner of Income-tax initiated proceedings under Section 25 of the Act and after giving opportunity of hearing to the respondents set aside the order of the Wealth-tax Officer with a view to enable him to reframe the assessment after taking into account all the material facts. The Commissioner of Wealth-tax referred to the valuation report submitted by the valuer which had not been taken into consideration by the Assessing Officer. The respondent preferred an appeal before the Tribunal which has been allowed on the ground that there was no reference under Section 16A of the Act for the year under consideration and, therefore, the valuation of the property in question made by the Valuation Officer was not a material for the Commissioner of Wealth-tax to pass an order under Section 25 of the Act.;