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M.T. Raju (Huf) Vs. Wealth-tax Ofifcer - Court Judgment

LegalCrystal Citation
CourtIncome Tax Appellate Tribunal ITAT Hyderabad
Decided On
Judge
Reported in(1984)7ITD707(Hyd.)
AppellantM.T. Raju (Huf)
RespondentWealth-tax Ofifcer
Excerpt:
1. these appeals, which are filed by the assessee, relate to the assessment years 1966-67 to 1976/77. the assessee is a huf and the appeals arise out of the wealth-tax proceedings.2. the assessee has sought to raise an additional ground in respect of the assessment years 1966-67 to 1969-70. by this ground, the assessee contests the validity of issue of notice under section 17 of the wealth-tax act, 1957 ('the act') for each of the assessment years referred to. the learned departmental representative contended that since this ground was not taken at any earlier stage, it would not be open to the assessee to canvass this issue before us. according to him, even though it may involve an issue of jurisdiction, there was a trend of decisions to hold that parties who had not availed of the.....
Judgment:
1. These appeals, which are filed by the assessee, relate to the assessment years 1966-67 to 1976/77. The assessee is a HUF and the appeals arise out of the wealth-tax proceedings.

2. The assessee has sought to raise an additional ground in respect of the assessment years 1966-67 to 1969-70. By this ground, the assessee contests the validity of issue of notice under Section 17 of the Wealth-tax Act, 1957 ('the Act') for each of the assessment years referred to. The learned departmental representative contended that since this ground was not taken at any earlier stage, it would not be open to the assessee to canvass this issue before us. According to him, even though it may involve an issue of jurisdiction, there was a trend of decisions to hold that parties who had not availed of the opportunity to contest an action at any earlier stage should not be permitted to do so as an afterthought. In support, he relied on the decision of the Gujarat High Court in CIT v. Sumantbhai C. Munshaw [1981] 128 ITR 142. Where an authority does not lack inherent jurisdiction but acts in contravention of a mandatory provision, it may perhaps be open to an aggrieved party to waive its objection to such breach in certain circumstances and in such an event, perhaps, the contention raised by the learned departmental representative would be entitled to consideration. However, where the point raised contests the very assumption of jurisdiction itself, it is open to an assessee to contest the same at any stage even though such plea was not taken initially, or even at the first appellate stage. If an authority for this view is necessary, there is the decision relied on by the learned counsel for the assessee of the Gujarat High Court in P.V. Doshi v. CIT [1978] 113 ITR 22 where the Gujarat High Court has held that the conditions which have to be fulfilled for initiation of action under Section 147 of the Income-tax Act, 1961 ('the 1961 Act') are mandatory safeguards prescribed in the public interest and there can never be waiver of such requirements. We, therefore, permit the assessee to raise this ground.

3. The contention of the learned counsel is based on the notices under Section 17 issued by the WTO. He has filed before us photostat copies and relies on the same in support of his arguments. Each of the notices for the assessment years 1966-67 to 1969-70 has been issued on 26-11-1974 and is addressed to Sri M.T. Raju, Rockdale Compound, Somajiguda, Hyderabad. Each notice bears the permanent account No. (GIR No. over-written as PAN), '42.003 HN 9276/Spl. III Hyd.'. The contention of the learned counsel is that the notices are clearly and unambiguously addressed to Sri M.T. Raju, that means to Sri M.T. Raju as 'individual'. Therefore, he states that though the HUF of Sri M.T.Raju may have filed returns in response to the notice, such returns would be non est in law and it would not be competent for the WTO to make any assessment on the HUF pursuant to the aforesaid notices issued for the respective assessment years. In support, he relied on the decision of the Supreme Court in the case of CIT v. K. Adinarayana Murty [1967] 65 ITR 607 and of the Andhra Pradesh High Court in the case of CIT v. B. Ranga Reddy [1979] 118 ITR 897. He stated that the status of an assessee is inextricably mixed up with the question as to who is the assessee and the notice should, therefore, have specified the status of HUF if it was the HUF which was to be assessed. Since in the present asec such status was not specified, he pleaded for the assessments for the years 1966-67 to 1969-70 being struck down.

4. The learned departmental representative, in reply, submitted that each of the notices bore the PAN 42.003 HN 9276/Spl. III Hyd. He stated that since the premanent account number was given and each assessee has a particular permanent account number, the assessee in question was clearly identified. He referred to the provisions of Section 139A of the 1961 Act, which set out the statutory provisions relating to permanent account numbers and he stated that these provisions provided that where a permanent account number had been allotted to an assessee before 11-4-197 which was the date on which the section came into force inserted by the Taxation Laws (Amendment) Act, 1975, the Board could by notification in the Official Gazette specify that such earlier allotted number would be the number allotted under the provisions of Section 139A. He also submitted that Explanation (b) to the aforesaid provision stated that 'permanent account number' meant a number which the ITO may allot to any person for the purpose of identification. He also referred to the Board's Notification No. SO 274(E), dated 1-4-1976, reproduced at page 553 of the Taxmann's Direct Taxes Circulars, Vol. 1, 1980 edn., which provided that permanent account numbers allotted prior to 1-4-1976 would be deemed to be permanent account numbers allotted under Section 139A, with effect from 1-4-1976. He also referred to the scheme of permanent account numbers which had been set out in the Press Note of the Board and stated that the notation 'H' applied only to HUF and 'P' applied to individual and, therefore, it was clear from the permanent account number 305 that the notice was issued to the HUF.According to him, the description of the assessee was, therefore, complete and the notices issued were valid.

5. The learned counsel for the assessee, in reply, submitted that the question for consideration was not whether the assessee understood whether the notices were issued in the status of HUF or not, but the question was whether the notices explicitly described the status of the assessee to whom they were issued. He reiterated that the use of the term 'Sri M.T. Raju' could only mean the individual concerned and could never mean the HUF. He also submitted that permanent account numbers were allotted under the 1961 Act and there was no statutory provision under the Act which referred to permanent account numbers allotted under the 1961 Act. According to him, the arguments of the learned departmental representative did not advance the case of the revenue any further.

6. We have considered the rival submissions. The provisions of Section 139A, relied on by the learned departmental representative came into force only from 1-4-1976. The notices in the present case were issued on 26-11-1974 and the returns in question in the status of HUF were also filed on 22-8-1975. The statutory provisions relied on by the learned departmental representative, therefore, cannot come to the help of the revenue. We have to decide the issue de hors the statutory provisions relied on by the learned departmental representative and also de hors the Board's notification which was issued in terms of the statutory provisions of Section 139A. However, we cannot ignore the fact that the system of allotment of permanent account numbers had come into vogue much earlier, as a matter of practice, in the department.

7. We have looked into the records and we find in the present case a letter dated 17-8-1973 from U. Satyanarayana & Co., chartered accountants, authorised representatives of the assessee, addressed to the WTO wherein the subject-matter reads 'Re : PAN-42.003-HN/927/6/Hyd.

IA Sri M.T. Raju HUF-wealth-tax assessments. It is noticed from the aforesaid letter written by the authorised representatives of the assessee that the assessee had acknowledged and noticed the permanent account number allotted to the HUF, i.e., PAN 42.003 HN/9276. The ' / ' between 927 and 6 in the assessee's letter is only a typographical insertion by oversight. The permanent account number came to be allotted to the assessee-HUF because the assessee-HUF, for the assessment year 1970-71, had filed a voluntary return of wealth on 13-3-1972. When the notices under Section 17 were issued in the present case, the assessee again, vide letter dated 21-4-1975 through its authorised representative, stated as under : Sub : P.A. No. 42-003-0276-Spl. III-Hyd. Sri M.T. Raju, HUF - Notice under Section 17 of the Wealth-tax Act - Assessment years 1966-67 to 1969-70. (1966-67) In the above matter you were pleased to serve the above notice on the assessee to file the wealth-tax returns of the HUF for the above years.

We are herewith filing our letter of authority for each year given by the above assesssee in our favour. As you are aware the assessee has to gather information with regard to the sales of plots of land in New Colony, Visakhapatnam, from the years 1965-66 onwards yearwise and the assessee has been making efforts to gather the information. The assessee is preoccupied with the current Parliament till the middle of May and he will not be in a position to gather the particulars till the end of May. The assessee instructed us to request you to grant time till the end of June 1975 to file the returns.

Here again, it would be noticed that the permanent account number was quoted by the assessee. In the number, '0276', the zero is a typograhical error for '9'. The present is, therefore, a case where correspondence was being exchanged earlier between the assessee-HUF and the WTO whereby the permanent account number allotted by the department was not only known to the assessee, but was acknowledged by the assessee. The notice under Section 17 issued for each of the years no doubt mentions 'Sri M.T. Raju', but the permanent account number given is that acknowledged as permanent account number by the assessee-HUF earlier. Therefore, as far as identity of the assessee to whom the notice was issued is concerned, there was complete consensus ad idem between the WTO on the one hand and the assessee on the other.

8. This is not a case where the WTO initiated proceedings against Sri M.T. Raju, individual, as in the case of K. Adinarayana Murty (supra) and the assessee concerned had filed the return in the status of an HUF. The WTO initiated proceedings in the present case only against the HUF itself. In the case of B. Ranga Reddy (supra), in the course of arguments, a decision of the Calcutta High Court in the case of Mahabir Prasad Poddar v. ITO [1976] 102 ITR 478 was relied on on behalf of the revenue to support its case. Their Lordships of the Andhra Pradesh High Court referred to the decision of the Calcutta High Court and the facts in the case before them and observed as under : Sri Rama Rao for the revenue relies upon a decision of the Calcutta High Court in Mahabir Prasad Poddar v. ITO [1976] 102 ITR 478 to contend that it was not necessary in the notice under Section 148 to describe the status of the assessee, whose assessment was proposed to be reopened and the said clarification could be made later. But a close reading of the decision would show that the learned judges of the Calcutta High Court made a distinction between cases where the status of the assessee was important and where that status was not important. We may as well quote what the learned judges observed on this aspect of the matter at page 490. That passage is as follows : 'If the status of the assessee was wrongly described, it can always be corrected by the Income-tax Officer in the course of the assessment proceedings, but that cannot affect the validity of the assessment proceedings. The position would of course be different where the status is so inextricably mixed up with the question as to who is the assessee that the description of the status one way would be referable to one assessee while the description of the status the other way would be referable to another assessee. Where such is the case, the description of the status may be indicative of the fact that a particular assessee is sought to be proceeded against and if sanction of the Commissioner is obtained for proceedings against that assessee, such sanction cannot be availed of for the purpose of initiating proceedings against another assessee who would be indicated by the description of the status the other way.' This was a passage which the learned judges extracted from the decision of the Bombay High Court and the learned judges referred to the same with approval.

Now, the facts above stated would disclose that the status of the assessee is inextricably mixed up with the question as to who is the assessee. We have already noted that the joint family was never an assessee and it was only the karta who was all the time the assessee in his individual capacity. Therefore, when Section 148 notice of July 30, 1967, was given to the assessee simply, without clarifying that it was with reference to the joint family, that notice cannot be taken advantage of to start proceedings under Section 148 against the Hindu joint family. (pp. 900-01) The case before the Andhra Pradesh High Court was one where the HUF was never an assessee earlier and it was only the individual who was an assessee and notice was issued for the first time to the HUF. From the facts which we have gleaned from the records, it is clear that the position is entirely different here. The assessee-HUF was an assessee earlier, it had been allotted a distinctive permanent account number, it acknowledged and recognised such number as belonging to the HUF, such number was quoted in the notice issued under Section 17 and the assessee, on receipt of such notice, had duly acknowledged that the notice related to the HUF. In these circumstances, we have to hold that the contention of the learned counsel that the proceedings were not validly initiated under Section 17 because the notice was addressed to 'Sri M.T. Raju' cannot be sustained.

9. The alternative contention of the learned counsel, again based on lack of jurisdiction for initiation of proceedings under Section 17, was that in the case of Sri M.T. Raju, individual, there was a mention in a letter dated 12-11-1971 in the course of his income-tax assessment for the years 1967-68 to 1971-72 that there were 7 acres of agricultural land at Waltair (i.e., the lands in question, the valuation of which is in dispute before us) and that it belonged to the HUF. According to the learned counsel, it was clear, therefore, that the lands were agricultural lands and since agricultural lands were not subject to wealth-tax in the assessment years 1966-67 to 1969-70, there was no question of wealth escaping assessment and if the WTO initiated action under Section 17 in the view that the lands in question were not agricultural, it was only a mere change in opinion and, therefore, he was-shut out from initiating action under Section 17. We are unable to agree with the learned counsel that this is a case of change of opinion. Notices under Section 17 for the assessment years 1966-67 to 1969-70 were issued because the assessee-HUF had not filed any returns earlier for those assessment years. Merely because Sri M.T. Raju, individual, in the course of his individual assessments had made certain assertions that some lands which belonged to the family were agricultural, it cannot be said that the matter of the nature of the lands belonging to the HUF was accepted by the ITO assessing the individual. As long as the lands belonged to the HUF, it could not be included in the wealth or the income therefrom could not be considered in the hands of the individual and it is academic for the Assessing Officer to consider whether the land is agricultural or not while dealing with the case of the individual. Hence, there is no change of opinion also. Therefore, we have to come to the conclusion that initiation of proceedings under Section 17 was valid for each of the assessment years 1966-67 to 1969-70 inclusive.

10. The next contention which arises in each of the assessment years 1966-67 to 1976-77 is whether the lands situated at Dibbalapalem in Visakhapatnam were agricultural lands or not. In the assessment year 1966-67, the area of such land was about 18 acres. About half of the land was sold in December 1966. The balance of 9 acres, therefore, alone comes up for consideration in the assessment years 1967-68 to 1976-77. The WTO has examined the nature of the land in detail in his assessment order for the assessment year 1970-71. The conclusion arrived at by him in that year has been followed in the remaining years. The WTO found that in all 18 acres of land had been purchased from Coromandel Co. (P.) Ltd. on 25-1-1957 for a total consideration of Rs. 10,000. In the assessment order for the assessment year 1970-71, the WTO has set out excerpts from the registered sale deed. He has emphasized certain narrations therein such as that the land in Schedule 'A' was described as 'four plots' and the land in Schedule 'B' was described as 'vacant land'. What he has sought to emphasize is that there was no mention or description that the lands in question at the time of purchase were agricultural lands. His conclusion was that the recitals showed that the lands were vacant lands situated within the municipal limits of Visakhapatnam and subjected to the levy of municipal taxes. He also referred to an agreement entered into by the assessee on 17-2-1971 with one P.R. Krishna Rao for the sale of land for an amount of Rs. 6,00,000 and the statement in the receipt passed for Rs. 50,000 received as advance referred to the land lay-out and lay-out approval numbers. Therefore, the WTO was of the view that the statements in the receipt further went to clinch the issue about the nature of the land.

11. The WTO referred to reliance placed by the assessee on entries in Adangal Register of Dibbalapalem wherein there were remarks to the effect that dry crops like gante, chodi and ulava were grown. In this connection, the WTO stated that the Revenue Inspector who had visited the concerned area on 10-9-1965, 14-9-1966 and 15-9-1967, had mentioned that all the lands were town sites and no crops were grown. The WTO went further to examine the concerned Revenue Inspector, Sri Kondaiah Naidu. He stated that there were no agricultural operations carried and, according to him, the remarks about the crops grown in the Adangal Register were written subsequently and in a different ink. He further stated that the remarks were false remarks. The WTO put this statement to the assessee whose authorised representative examined the Revenue Inspector. The Revenue Inspector struck to his statement that he had gone round the entire village and no agricultural operations were found to have taken place. The WTO also relied on the letter from the Municipal Commissioner that action was being taken to levy vacant land tax on the lands in question. He also mentioned that in connection with the Agricultural Ceiling Act, the assessee had claimed that the lands at Dibbalapalem were non-agricultural lands.

12. The WTO considered the aforesaid factual data in the light of the contentions of the assessee that the lands were agricultural lands which have been summarised in the assessment order for 1970-71 as under : (i) The lands were subjected to land revenue (copies of the revenue receipts were filed).

(ii) Certified copy of the entries made in the Adangal Register of Dibbalapalem, wherein dry crops like 'ganti, chodi, ulava' were shown to have only been grown.

(iii) No vacant land tax under Section 85 of the A.P. Municipalities Act was ever levied with the result it must be presumed that the land in question was used for agricultural purposes only.

(iv) The land in question was never converted for non-agricultural use, although at one point of time he thought of converting into non-agricultural land by applying to the municipality but later on the said idea was dropped.

(v) Relying on the aforesaid pieces of evidence the assessee urged that his case sequarely falls within the ratio laid down by the Andhra Pradesh High Court in the case of Officer-In-Charge (Court of Wards) v. CWT [1969] 72 ITR 552 (FB) and as such it should be treated as agricultural in nature.

According to the WTO, an overall appraisal of the evidence led to the conclusion that the lands in question were not agricultural lands.

13. The assessee appealed to the AAC who considered the issue in his appellate order for the year 1966-67 and which reasoning was adopted in the remaining years. The AAC observed that the assessee did not have any bullocks nor any tractor and that the observations made by the WTO that the lands were declared as urban lands not falling Under the purview of Agricultural Land Ceiling Act was a correct observation. He further stated that the tests laid down by the Supreme Court in CWT v.Officer-In-Charge (Court of Wards) [1976] 105 ITR 133, were to be applied to determine the character of the lands and it was patent that no agricultural operations were carried on in the lands and there was no evidence to indicate the intention of the owner to connect it with any agricultural purpose. He also referred to the fact that a lay-out plan had been approved as far back as 20-6-1970 and house sites had been clearly marked in an area of 35,568 sq. yds. He also stated that the Valuation Officer of the department, who went to make a study for the purpose of valuation sometime in 1973, found that the land was not flat and had not been levelled and agricultural operations were not possible due to undulation and there was no irrigation facility like wells, borewells, etc. He, therefore, concluded that the land in question was not agricultural land.

14. The learned counsel for the assessee submitted before us that there was evidence in the form of entries in the Adangal Register to show that agricultural operations were actually carried on in the lands in question. It was also stated that municipal tax could be levied in respect of agricultural land and mere mention that municipal tax was payable in the purchase deed could not alter the nature of the land. No conversion fee had been levied for change from agricultural land into non-agricultural land and in support of this the contents of a letter dated 28-5-1976 from the Commissioner of Visakhapatnam Municipality was relied on. It was also stated that in connection with the Urban Land Ceiling Act, declarations were filed describing the land as agricultural land. The annexures to the declarations filed in this respect were relied on, several judicial pronouncements were also relied on by the learned counsel for the assessee in support of the plea that the land, having regard to the evidence on record, was clearly agricultural in nature. We shall advert to these decisions when discussing the contentions of parties later.

15. On behalf of the revenue, stress was placed on the fact that the letter of the Commissioner of Visakhapatnam Municipality dated 28-5-1976 itself showed that a lay-out for the land in question was approved on 27-6-1960. Hence, it was stated, though no conversion fee was paid, it was clear that the assessee had intended to use the land for non-agricultural purposes only. Further, it was stated that though there was mention in the Adangal Register about crops being grown, the Revenue Inspector, when cross-examined on what he had seen during spot inspections, had categorically mentioned that no agricultural operations were carried on at any time. Therefore, the entries in the Adangal Register, according to the learned departmental representative, did not advance the assessee's case any further. According to him, when proceedings were taken under the Agricultural Land Ceiling Act, it had been declared by the assessee that the land in question was an urban land. The learned departmental representative also relied on certain judicial pronouncements in support of his plea which we shall advert to later.

16. We have considered the rival submissions. The judicial proncounce-ments relied on behalf of the assessee are quite a few. In the case of Sercon (P.) Ltd. v. CIT [1982] 136 ITR 881 (Guj.), it was held that if land was an agricultural land in the revenue records but such land was lying fallow, this was immaterial where there was no evidence of plans for construction, etc. In the case of Manibhai Motibhai Patel v. CIT [1981] 131 ITR 120 (Guj.), it was held that actual user of the land and the lease given for such purpose would be relevant evidence. In CIT v. Sutton & Sons Ltd. [1981] 127 ITR 57 (Cal.), it was held that where land was used for agricultural purposes, it became agricultural in nature and the purpose for which agriculture was carried on was not relevant, i.e., for raising a seed farm, etc. In Dr. Motibhai D. Patel v. CIT [1981] 127 ITR 671 (Guj.), agricultural operations were actually carried on. In such circumstances, it was held that an application alone for conversion of the land did not make it non-agricultural. The case of Chhotalal Prabhudas v. CIT [1979] 116 ITR 631 (Guj.) is an authority for the proposition that entries in the record of rights are prima facie evidence. The actual user to which the land was put is also relevant evidence, but the entries can be rebutted by other evidence. The decision in Smt. Chandravati Atmaram Patel v.CIT [1978] 114 ITR 302 (Guj.) is an authority for the proposition that the actual user of the land has to be looked into as well as what the land would ordinarily be used for or what it was meant to be used for.

In the case of CIT v. Manilal Somnath [1977] 106 ITR 917 (Guj.), it was stated that if the land is used for agriculture, the presumption was that it was an agricultural land. Yet, even this would be a rebuttable presumption. A case heavily relied on was that of Gemini Pictures Circuit (P.) Ltd. v. CIT [1981] 130 ITR 686 (Mad.). In this case, it was held that once an assessee establishes that the land in question was continuously used for agricultural purposes, then the prima facie presumption arising from such user was that the land in question continues to be agricultural land. The Court held that such presumption was not rebutted by placing emphasis on the environment or the situation of the land, viz., that it was in a well developed area within the municipal or city limits. The presumption could be rebutted only by showing that agricultural user was a stop-gap arrangement, etc.

The decision in CIT v. Vajulal Chunilal (HUF) [1979] 120 ITR 21 (Guj.) is again authority for the proposition that entries in the record of rights are good prima facie evidence regarding agricultural land and if the land was actually used for agricultural purposes, it would be agricultural land and the mere fact that permission had been granted for sale of agricultural land to a non-agriculturist would not make the land cease to be agricultural land. This would be the position as long as the conditions for the permission were complied with. In Addl. CIT v. Tarachand Jain [1980] 123 ITR 567 (Pat), it was stated that the real intention of the owner has to be ascertained and the character of the adjoining lands was also relevant. In CIT v. Siddharth J. Desai [1983] 139 ITR 628 (Guj.), the land purchased was agricultural land. It continued to be listed as agricultural land in revenue records and for a period of three years after purchase, agricultural operations were actually carried on. The assessee obtained permission and sold it to a housing society. In these circumstances, the Court held that though the land prior to sale was not actually put to agricultural use for about a year, there was no evidence to show that it had been converted into any other use and, therefore, on the date of sale, the land was agricultural land.

17. In the case relied on on behalf of the revenue, i.e., CIT v.Sarifabibi Mohmed Ibrahim [1982] 136 ITR 621 (Guj.), it was held that the presumption raised by entries in the revenue records that the land was agricultural could be rebutted and the fact of agriculture being carried on was also relevant but was again capable of being rebutted.

The situation of the land, the sale of the land to a non-agriculturist and on a square yard basis and the price at which sold were all factors which had to be considered for deciding whether the land was agricultural and one of the tests would be to find out if a prudent agriculturist would purchase the land to carry on agricultural operations having regard to the price to be paid, etc.

18. From the aforesaid judicial pronouncements, it is clear that the entries in the revenue records are prima facie evidence of the nature of the land ; the actual user to which the land was put is also relevant evidence. But, the presumption in each case is rebuttable. The fact that the land lay fallow is immaterial where there is no plan for construction, etc. In the present case, at the time of purchase, which was in 1957, there was no mention in the relevant document that the land was agricultural. On the other hand, there was reference to some of the land being vacant and some being in plots. Material came on record to show that as far back as 1960 a lay-out had been submitted for approval and it had also been approved though no conversion fee was paid. This is clear from the letter of the Commissioner of Visakhapatnam Municipality dated 28-5-1976 which the assessee relied on to show that no municipal tax as vacant land had been levied till then.

The Adangal Registers no doubt contained entries to show that some crops were raised, but the WTO examined the Revenue Inspector who stated categorically that he visited the entire village and had found no agriculture at the material time. The assessee was also given a chance of cross-examining the Revenue Inspector but the material on record does not show his version being discredited. In a declaration before the revenue authorities in connection with the Agricultural Land Ceiling Act, the WTO found that the assessee had claimed that the lands were urban lands and, therefore, did not fall under the purview of the said Act. This statement of the WTO does not stand controverted in any manner. Under the Urban Land Ceiling Act, declarations were filed in which the land in question was shown as agricultural land. Therefore, since a different stand has been taken in either declaration, the statements in the declarations themselves do not advance the case of either the assessee or the revenue. Considering that a lay-out had been applied for as far back as 1960 and had been approved and that it has not been established that any agricultural operations were actually carried on in the land at any time, the entries in the Adangal Register stand offset by the statement of the Revenue Inspector who had actually made the inspection and that at the time of subsequent agreement of sale in 1971, again the advance was said to have been received in respect of land lay-out of which was approved in 1960, we consider that it has not been established that the lands in question were agricultural lands. We have, therefore, to hold that the lands in question were not agricultural lands, 19. The next issue is regarding the valuation of the lands for the assessment years 1967-68 to 1972-73. The value taken of Rs. 3,00,000 in the assessment year 1966-67 has not been contested and the matter is not in issue for the assessment years subsequent to 1973-74. This is because in those years the AAC had directed the lands to be valued on the basis of the provisions of the Urban Land Ceiling Act, etc.

20. In the present case, for the years in which the valuation is in dispute, the submission of the assessee is that a registered valuer had arrived at a value of only Rs. 1,69,500 where the departmental valuer had placed much higher values and on that basis the values arrived by him for 1971-72 to 1973-74 ranged from Rs. 4,50,000 to Rs. 5,50,000.

The AAC had fixed the values at Rs. 2,40,000 for 1967-68, Rs. 3,00,000 for 1968-69, Rs. 3,25,000 for 1969-70, Rs. 3,40,000 for 1970-71, Rs. 5,60,000 for 1971-72 and Rs. 5,75,000 for 1972-73. He had considered the agreement to sell the lands in February 1971 in which there was an agreement to sell land for Rs. 6,00,000. Taking the value as on 31-3-1966 at Rs. 1,50,000 and at Rs. 6,00,000 on 31-3-1971, the rate of increase during the period of rive years was Rs. 90,000 on an average per year according to the AAC. Starting with the value of Rs. 1,50,000 in 1966, the AAC made suitable adjustments from year to year. The AAC had stated in the course of his order that the value adopted by the Valuation Officer of an average between values determined by him and the value based on sale agreement of 1971 was not in order. The AAC also held that one cannot project oneself into future with reference to the impending legislation regarding land ceiling, etc. It was on this basis he arrived at the values referred to, which are in dispute.

21. We had the benefit of hearing the learned Valuation Officer. The learned counsel for the assessee submitted that the assessee had furnished several comparable sales which showed that the sale rate was in many instances Rs. 4 per sq. yd. when the Valuation Officer contended that if for developed area the values were taken, the value taken was hardly about Rs. 12 per sq. yd. at the time referred to. This was also stated to be on the basis of comparable sales. We find that at the stage of appeal before the AAC, the objections of the assessee were put to the Valuation Officer who filed a very elaborate report before the AAC dated 11-3-1980. This was also put to the assessee who made very detailed submissions in his turn on the same. However, these submissions do not stand ex facie analysed in the order of the AAC. It is necessary for a proper valuation to be done to have these submissions properly analysed and adjudicated upon. The submission of the learned counsel for the assessee was that in the case of a relation, i.e., WT Appeal Nos. 148 to 155 (Hyd.) of 1978-79, dated 28-2-1979, the Tribunal had gone into the question of the valuation of certain lands of Visakhapatnam and had considered a value of about Rs. 4 per sq. yd. to be in order. According to the learned Valuation Officer, these lands were differently situated. Since considerable material is available on record which had not been discussed, we are unable to arrive at a conclusion regarding the valuation to be adopted of the land for the assessment years 1967-68 to 1972-73. We, therefore, set aside the valuations as made by the AAC and restore the matter to his file in respect of value of the lands in question situated at Dibbalapalem for the assessment years 1967-68 to 1972-73. He would re-determine the value of lands after considering and discussing material relied on by the assessee and by the Valuation Officer as also any other material which may be produced at the stage of hearing by the WTO or by the assessee including the order of the Tribunal referred to.

22. There is one other contention which is urged for the assessment years 1973-74 to 1976-77. The assessee pleads for deletion of Rs. 2,30,000 added in the net wealth for these years in respect of amount forfeited out of advance received for sale of land under the agreement to sell. The forfeited amount is the assessee's wealth and inclusion thereof is in order. However, the assessee submits that subsequently a compromise was entered into and, therefore, in valuing the land only such percentage of the sale price as would come to the assessee in terms of the compromise can be taken. For the assessment years 1973-74 to 1976-77, the question of valuation of the lands stands restored to the WTO by the AAC. In the course of revaluation, in addition to the directions given by the AAC, the WTO would also consider this contention urged by the assessee.

23. The result is, the appeal for the assessment year 1966-67 is dismissed and the appeals for the remaining years are treated as allowed in part for statistical purposes.


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