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Motichand Virpal Shah Vs. Wealth-tax Officer. - Court Judgment

LegalCrystal Citation
CourtIncome Tax Appellate Tribunal ITAT Ahmedabad
Decided On
Reported in(1984)8ITD815(Ahd.)
AppellantMotichand Virpal Shah
RespondentWealth-tax Officer.
Excerpt:
.....as well as from the arguments of shri kaji, we do not agree with the assessee that there was a mistake apparent on record. mistake apparent on record means clerical mistake, printing mistake, typographical mistake and incorporation of wrong facts in the order. the mistake which the learned counsel has tried to point out is not covered by any of these mistakes. so far as the case law is concerned, normally it cannot be said that it is a mistake apparent on record. of course, the supreme court decision, which is directly on the issue and similar on facts, remained unapplied on that case, only it can be said that there is a mistake apparent on record. in this case, the decision of their lordships of the supreme court in mrs. khorshed shappor chenais case (supra) is not directly on the.....
Judgment:
Per Shri Y. R. Meena, Judicial Member - These five miscellaneous application are filed by the assessee. By these applications the assessee has tried to point out an apparent mistake in the order of the Tribunal as the Tribunal has not considered the decision of their Lordships of the Supreme Court in the case of Mrs. Khorshed Shappor Chenai v. ACED [1980] 122 ITR 21 and decisions of the Andhra Pradesh and Madras High courts in CWT v. Amatual Kareem [1981] 127 ITR 549 and E. R. Kothandaraman v. CWT [1981] 129 ITR 450. He emphasised in para 7 only on the decision of the Supreme Court in Mrs. Khorshed Shapoor Chenais case (supra). From the contents of the application as well as from the arguments of Shri Kaji, we do not agree with the assessee that there was a mistake apparent on record. Mistake apparent on record means clerical mistake, printing mistake, typographical mistake and incorporation of wrong facts in the order. The mistake which the learned counsel has tried to point out is not covered by any of these mistakes. So far as the case law is concerned, normally it cannot be said that it is a mistake apparent on record. Of course, the Supreme Court decision, which is directly on the issue and similar on facts, remained unapplied on that case, only it can be said that there is a mistake apparent on record. In this case, the decision of their Lordships of the Supreme Court in Mrs. Khorshed Shappor Chenais case (supra) is not directly on the issue. The main issue before their Lordships in Mrs. Khorshed Shappor Chenais case (supra) was regarding reopening of assessment on the basis of revision of compensation by the higher authorities. Their Lordships held that that is a change of opinion and on that basis the assessment cannot be reopened. The case before us was not of reopening but the fact that the assessee has claimed a particular value and the same was finalised by the High Court and the ITO has not reopened the assessment but has taken the value which is claimed by the assessee. Therefore, in this case in cannot be said that the Supreme Court decision is directly on the issue. The facts were different and the main issue was also different. Therefore, we considered that decision but is not necessary that everything should be reproduced in the order. In view of this, there is no apparent mistake in our order.

Per Shri K. T. Thakore, Account Member - I have carefully gone through the order made on the above cited miscellaneous application as made by my learned brother. With utmost respect, I am unable to agree with the conclusion reached by him that there is no mistake apparent in the original order in WT Appeal Nos. 859 to 863 (Ahd.) of 1981. I give my reasons in the succeeding paragraphs.

2. It is not correct to say, with respect, that the decision of the Supreme Court in Mrs. Khorshed Shapoor Chenais case (supra) is not directly on the issue. In fact in Mrs. Khorshed Shappor Chenais case (supra) it is clearly stated thus : "... This, however, does not mean that the Civil Courts evaluation of this right done subsequently would be its valuation as at the relevant date either under the Estate Duty Act or the Wealth-tax Act. It will be the duty of the assessing authority under either of the enactments to evaluate this property (right to receive compensation at market value on the date of relevant notification) as on the relevant date being the date of the death under the Estate Duty Act and valuation date under the Wealth-tax Act). Under section 36 of the Estate Duty Act the assessing authority has to estimate the value of this property at the price which it would fetch if sold in the open market at the time of the deceaseds death. In the case of the right to receive compensation, which is property, where the collectors award has been made but has not been accepted or has been accepted under protest and a reference is sought or is pending in a Civil Court at the date of the deceaseds death, the estimated value can never be below the figure quantified by the Collector because under section 25(1) of the Land Acquisition Act, the Civil Court cannot award any amount below that awarded by the Collector, the estimated value can be equal to the Collectors awarded or more but can never be equal to the tall claim made by the client in the reference nor equal to the claim actually awarded by the Civil Court inasmuch as the risk or hazard of litigation would be a detracting factor while arriving at the reasonable and proper value of this property as on the date of deceaseds death. The assessing authority will have to estimate the value having regard to the peculiar nature of the property, its marketability and the surrounding circumstances including the risk or hazard of litigation looming large eat the relevant date ...." 3. In the light of the above decision of the Honble Supreme Court, which lays down the law on the subject, it may not be appropriate to state that the said decision has no application in wealth-tax matter.

Secondary, the assessee had made written submission by his letter dated 3-2-1983 in which the relevant extract at page 32 has been reproduced.

The fact that the said decision was not considered, therefore, would constitute a mistake apparent from record. Thirdly, the value of the compensation receivable by the assessee in the light of the above observations of the Supreme Court has to be determined somewhere between the value awarded by the Collector or the claim made by the claimant. It may not be equal to the claim actually awarded by the Civil Court in view of the risk of hazard of litigation. Therefore, the value of the compensation on the relevant valuation dated will have to be estimated some where between the above two terminee. It would be, therefore, proper to remit the matter to the WTO to estimate the value of compensation on the relevant valuation dates in light of the above principle laid down by the Supreme Court which, as stated earlier, would be applicable to the wealth-tax proceedings also. It may be further added that the decision of the Supreme Court, which was not considered, even if not pointed out by the assessee would constitute a mistake apparent from record as it would be a mistake of law which would fall within the mischief of rectification proceedings.

4. I am, therefore, of the opinion that the original order should be suitably rectified as indicated above.

Per Shri K. T. Thakore, Accountant Member - As we have differed in our conclusion about the disposal of miscellaneous application Nos. 9 to 13 (Ahd.) of 1983, we here by refers the following question to the learned Vice President for being referred to a Third Member under section 24 (11) of the Wealth-Tax Act, 1957 (the Act) : "Whether, on the facts and in the circumstances of the case, the miscellaneous application filled by the assessee bearing Nos. 9 to 13 (Ahd.) of 1983 dated April 1983 deserves to be allowed on the grounds stated therein ?" Per Shri V. Balasubramanian, Vice President - Certain agricultural lands belonging to the assessee were acquired by the Government. The Land Acquisition Officer (LAO) awarded compensation of Rs. 71,474. The assessee took the matter to the District Court claiming a compensation of Rs. 4,95,000. The District Judge granted an additional compensation of Rs. 67,667. On the matter being taken further to the High Court, the High Court gave its decision on 22-10-1980. For assessment years 1972-73 to 1976-77, the WTO, in including the asset represented by the acquired lands for wealth tax purposes, took its valuation at Rs. 4,95,000-the amount claimed by the assessee before the District Court.

The AAC upheld the ITOs order with modification that the valuation be fixed on the basis of the High Courts decision. On the matter coming up on appeal before the Tribunal, the Tribunal upheld the AACs order.

2. The assessee came up with a miscellaneous application before the Tribunal claiming that at the time of the original hearing of the appeal, he had referred to the Supreme Court decision in Mrs. Khorshed Shapoor Chenais case (supra) in the matter of Mrs. Khorshed Shapoor Chenai. But the Tribunal had not referred to or followed the binding decision of the Supreme Court. This was an error apparent from the record. The Tribunal had not even referred to the Supreme Court decision. In effect it was prayed that the Tribunal should rectify its order dated 20-2-1983 by molding its final decision on the basis of the Supreme Court decision. In disposing of this miscellaneous application the two learned member having differed, the following point of difference was referred to me as the Third Member of resolution : "Whether, on the facts and in the circumstances of the case, the miscellaneous application filed by the assessee bearing Nos. 9 to 13 (Ahd.) of 1983 dated April 1983 deserves to be allowed, on the grounds stated therein ?" 3. The parties were heard. It is clear that at the time of the original hearing, the learned counsel for the assessee had referred to the ratio laid down by the Supreme Court in Rameshwarlal Sanwarmal v. CIT [1980] 122 ITR 1. This was specifically pointed out by the counsel in his letter dated 3-2-1983. The Supreme Court decision, also concerned with the valuation of lands acquired by the State authorities with compensation received at different intervals, has laid down the manner of valuing the asset. This obtains at Mrs. Khorshed Shapoor Chenais case (supra). Since the Supreme court has clearly laid down the law on the point, it was obligatory on the Bench of The Tribunal to follow it in evaluating this asset. The learned counsel for the department has pointed out that the actual question involved in Mrs. Khorshed Shapoor Chenais case (supra) was one of reopening the assessment and not the valuation. The passage referred to the learned Account Members order and obtaining at page 32 of the report does not support this contention. There is a clear mistake apparent from record by not following the Supreme Court decision. The Order, therefore, requires to the rectified. I agree with the learned Accountant Member that the original order should be suitably rectified so as to conform to the ratio laid down by the Supreme Court. The matter will go back to the original Bench which heard the appeal for disposal according to law.


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