R.K. Agrawal, J. - (1.) The Tribunal, Delhi, has referred the following question of law under Section 27(1) of the WT Act, 1957 (hereinafter referred to as "the Act") for opinion to this Court: "Whether, on the facts and in the circumstances of the case, the Hon'ble Tribunal was justified in quashing the order of the CWT under Section 25(2) ?" The reference relates to the asst. yrs. 1983-84 and 1984-85. Briefly stated, the facts giving rise to the present reference are as follows :
(2.) The respondent is an individual. For the assessment years in question the assessment was completed under Section 16(3) of the Act vide order dt. 24th July, 1984 and 22nd March, 1985, respectively determining taxable net wealth at Rs. 11,57,300 and Rs. 11,24,000. The returned wealth of the respondent was accepted but for addition of Rs. 50,000 made in each of the two years in respect of the value of immovable property known as Shah Theatre, shown at Rs. 13,00,000. The WTO noted that the same property was valued at Rs. 13,50,000 subsequent to the completion of the assessment for the two years in question. The CWT examined the record and after coming to the conclusion that the assessment was erroneous and prejudicial to the Revenue, initiated proceedings under Section 25(2) of the Act on the following grounds : "(a) The value of Shah Theatre had been taken at Rs. 13 lakhs for the asst. yr. 1972-73 on profit basis. But the same value had been taken for the subsequent assessment years upto 1984-85. The above method was not correct because the profit from the said theatre was increasing year after year. For the asst. yr. 1980-81, "total income" from the theatre was Rs. 3,12,500. It graduaUy increased and for the asst. yr. 1984-85, the "total income" came to Rs. 4,77,642. (b) The valuation of Shah Theatre should also have been increased on the basis of above increase in profit and also in view of the general appreciation in the value of the immovable property. The ITO failed to do this." The respondent resisted the CIT's notice on the ground that he was receiving fixed rent for the last several years without any change and that the figures of the total income of Shah Theatre (P) Ltd. to whom the cinema hall has been let out on rent, has no relevance as far as the assessment at his hand was concerned. The CWT, however, did not find any substance in the submission made by the respondent as in his view the gross higher receipts of the Shah Theatre as well as net profit showing increasing trend, was material for valuing the cinema building. He also noted that for the asst. yr. 1.980-81 the net profit returned by Shah Theatre was Rs. 38,514 whereas it has increased to Rs. 64,156 for the asst. yr. 1984-85. According to him, the profits earned provided a guide in the valuation of properties like cinema, hotels, cold storage, etc. In this view of the matter, the CWT concluded that the assessment made by the WTO were erroneous and prejudicial to the interest of the Revenue and after setting aside the assessment order, directed the WTO to compute the value on the basis of profits earned by the Theatre. Feeling aggrieved by the said. order, the respondent preferred separate appeals before the Tribunal. The Tribunal had upheld the plea of the respondent and had quashed the order passed by the CWT under Section 25(2) of the Act.
(3.) We have heard Sri A.N. Mahajan, learned standing counsel for the petitioner. Nobody has appeared for the respondent-assessee.;