MAHARANI DURGESHWARI SHAHI V. THE COMMISSIONER OF WEALTH TAX

MA/220/2002

AI Insights

The case involves Maharani Durgeshwari Shahi, the appellant, contesting the valuation of her property, Block C of Hathwa Market in Chapra, for wealth tax purposes. Initially, the assessing authority valued the property higher than the appellant's declared value of Rs. 3,00,000. The Commissioner of Income Tax (Appeals) reduced the valuation to Rs. 3,00,000, which was later restored by the Tribunal. The appellant argued that the Tribunal should have adhered to its previous rulings on similar valuations, citing principles of res judicata and consistency. However, the Tribunal and the High Court found that the factual matrix had changed, justifying a different valuation.

• Counselvise Citation: [2009] 140 COUNSELVISE.COM (IT) 692315 (HC-PATNA)
• Appeal Type: Others
• Pronouncement Date: 27-04-2009
• Assessment Year: misc
• Other Referred Cases: Radhasoami Satsang Vs. CIT, (1992) ITR 193
• Laws Referred To: Wealth Tax Act, 1957, Code of Civil Procedure
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: HARSHWARDHAN PRASAD; ANCHANA SINHA
• Assessee Lawyers: AJAY RASTOGI
• Keywords: Property valuation; Res Judicata; Wealth Tax; Consistency in Law
• Section: 11

Judgement Text

" Appeal From Appellate Order No.218 of 2002 With 219 of 2002 With 220 of 2002 With 221 of 2002. ------------ Against the order dated 20.12.2000 passed by the Income Tax Appellate Tribunal, Patna Bench, Patna in WTA No. 16(Pat)/2000, WTA No. 14(Pat)/2000 , WTA No.15(Pat)/2000 and against the order dated 18.1.2002 passed by Wealth Tax Appellate Tribunal, Patna Bench, Patna in WTA No.10/Pat/2000. --------------- In Misc. Appeal Nos. 218 of 2002, 219 of 2002 and 220 of 2002. Maharani Durgeshwari Shahi, D/O Late Shiv Shankar Pd. Singh, Hathwa House, South Gandhi Maidan, P.S. Kotwali, Dist. Patna ------------- Assessee/ Appellant Versus 1. The Commissioner of Wealth Tax-II, Patna, C.R. Building 2nd Floor Beerchand Patel Path, Patna. 2. The Asstt. Commissioner of Wealth Tax Cir 5 IIIrd Floor, Lok Nayak Jai Prakash Bhawan, P.S. Kotwali, Distt. Patna ---- Assessing Officer/Respondents. In Misc. Appeal No. 221 of 2002 Maharani Durgeshwari Shahi, D/O Late Shiv Shankar Pd. Singh, Hathwa House, South Gandhi Maidan, P.S. Kotwali, Dist.-Patna -------- Assessee/Appellant. Versus 1. The Commissioner of Wealth Tax-II, Patna. 2. The Wealth Tax Officer, Ward- , Patna ----- Assessing Officer/Respondents. ------------- ------------ For the Appellant : Mr. Ajay Kumar Rastogi (in all cases) For the Income Tax : Mr. Harshwardhan Prasad, Sr.Standing Counsel 2 Mrs. Anchana Sinha, J.C.to Sr.S.C. (in all cases) ------------- P R E S E N T THE HON'BLE MR. JUSTICE SUDHIR KUMAR KATRIAR THE HON'BLE MR. JUSTICE KISHORE K. MANDAL S.K. Katriar & Kishore K. Mandal, J.J. Heard Mr. Ajay Kumar Rastogi for the appellants, and Mr. Harshwardhan Prasad, learned Sr. Standing Counsel. The four appeals raise common issues of facts and law and are, therefore, being disposed of by a common order, though the four appeals appertain to different assessment years. The impugned order of Income Tax Appellate Tribunal, Patna Bench, is common for Misc. Appeal Nos. 218 of 2002, 219 of 2002, and 220 of 2002. 2. We shall draw the basic facts from Misc. Appeal No.218 of 2002, except by specific reference to any other appeal. It arises out of proceedings under the Wealth Tax Act, 1957 (hereinafter referred to as the Act). The returns of the assessee were not accepted by the learned assessing authority by order dated 18.8.1999, and some additions were made. The assessee preferred appeal and took the stand that value of the property should be restricted to Rs.3,00,000/-. The contention was up-held by the learned Commissioner of Income Tax(A)- 3 II, Patna, by its order dated 27.4.2000, valuation of the property in question was restricted to Rs.3,00,000/-, and the order of the learned assessing authority was accordingly modified. The department preferred appeal before the Tribunal which has been allowed, the order of the learned appellate authority has been set aside, and that of the learned assessing authority restored. 3. It relates to assessment of wealth tax payable by the appellant-assessee with respect to her properties situate in township of Chapra. The appellant is the owner of the movable properties known as Hathwa Market in the township of Chapra which has three blocks, namely, Block A, B and C. She entered into an agreement with the Chapra Municipality for out-right sale of the same. Block A of the same was agreed to be sold for Rs. 4,90,000/-, Block B for Rs. 4,35,000/-, and Block C for a sum of Rs.3,00,000/-. The deed of absolute sale was registered as per the agreement for sale of 17.11.1974, whereby Block A and B were alienated as per the agreement by different registered sale deeds, executed by the appellant in favour of the Chapra Municipality, and is not the subject matter of the present set of appeals. The controversy is with respect to Block C. It appears that the appellant declined to alienate the property as per the agreement leading to Title Suit 4 No. 97 of 1982( The Municipal Commissioner of Chapra Municipality, Chapra Vrs.Maharani Durgeshwari Shahi) in the court of the learned Sub-Judge, Chapra. Assessment of block C under the Act is the subject matter of the appeals for the four periods indicated hereinbelow: Re: Misc.Appeal No.219 of 2002 This appeal relates to assessment year 1994-95. By order dated 18.8.1999, passed by the learned assessing authority, the figures returned by the assessee were not accepted leading to enhancement in valuation of the property. Aggrieved by the order, the learned assessing authority preferred appeal which was allowed by the order dated 27.4.2000, passed by the learned Commissioner of Income Tax(A)-II, Patna, whereby he accepted the contention of the assessee (appellant) that the valuation of Block C of the market should be restricted to Rs.3,00,000/- for the assessment year, allowed the appeal, and accordingly modified the order of the learned assessing authority. Aggrieved by this order, the department preferred appeal which was allowed by the learned Tribunal by the aforesaid order dated 20.12.2000. The order of the learned appellate authority was set aside, and that of the learned assessing authority was restored. Re: Misc. Appeal No.220 of 2002 5 This appeal is with respect to the period for assessment year 1995-96. The learned assessing authority passed an identical order on 18.8.1999. The appeal preferred by the assessee was allowed by an identical order, passed by the learned Commissioner of Income Tax, valuation of the property was restricted to Rs.3,00,000/, and the order of the learned assessing authority was modified. The department preferred appeal before the Tribunal which was allowed, the order of the learned appellate authority was set aside, and that of the learned assessing authority was restored by the aforesaid common order dated 20.12.2000. Re: Misc. Appeal No.221 of 2002 The basic difference between this appeal on the one hand, and the other three appeals is that the present one was disposed of by a different order of the learned Tribunal. By order dated 18.8.1999, the learned assessing authority had enhanced the valuation of the property, which was set aside by the learned Commissioner of Income Tax by its order dated 31.3.2000, and restricted the valuation of the property to Rs.3,00,000/-. The learned Tribunal allowed the department’s appeal by its order dated 18.1.2002, set aside the order of the learned appellate authority, and restored that of the learned first authority. 6 4. While assailing the validity of the impugned order, learned counsel for the appellant submits that the learned Tribunal has erred in holding that it is not bound by the orders of the learned Tribunal for three other periods with respect to the same property, namely, assessment years 1979-80, 1980- 81, and 1991-92, which restricted the valuation of the property in question to Rs.3,00,000/-. He further submits that the principles of Res Judicata enshrined in section 11 of the Code of Civil Procedure may not in terms apply to the present proceedings, but the same in principle and substance, and the rule of consistency, do apply in the present case. He next submits that the appellant’s claim to restrict the valuation of the property to Rs.3,00,000/- is on sound basis, namely, the agreement of sale inter-parties. He submits in the same vein that it was after all a common agreement of 17.11.1974, for sale of the three distinct blocks of the same property agreed upon for sale. Sale of blocks A and B has already taken place, therefore, there is no basis for the learned Tribunal to take a view other than the recitals in the agreement for sale inter- parties in a situation where the intending purchaser is a statutory body. He relies on the judgment in the case of Radhasoami Satsang Vs. CIT, (1992) ITR 193. 7 5. Learned Senior Standing Counsel has supported the impugned order and has advanced various submissions in support of the impugned orders. 6. We have perused the materials on record and considered the submissions of learned counsel for the parties. By order dated 11.10.2006, passed in the present appeals, the following substantial questions of law have been formulated to be answered by this Court: (1)Whether on the facts and in the circumstances of the case the appellant’s case the Tribunal is correct in reversing the order of CIT (A) and restoring the assessment order on valuation of ‘C’ Block of Hatwa Market, Chapra? (2) Whether the Tribunal is justified in not following its own order of assessment year 1991-92 in WTA no. 9/Pat/95 while passing the impugned order? (3) Whether the rule of precedence require the Tribunal to follow its own order in the same case having same facts and whether any departure there from is legally permissible? (4) Whether on the facts and in the circumstances of the case the Tribunal is justified in disturbing the value of the property during the pendency of civil litigation? 7. The agreement of sale is of 17.11.1974, whereby Block C of the property was presumably agreed to be sold for sum of Rs.3,00,000/-. The periods in question have been indicated hereinabove. The agreement for sale of Block C has 8 been embroiled in a litigation leading to Title Suit no.97 of 1982 at the instance of the Corporation. We have not been informed about the present position of the suit, whether the same has been disposed of, or is still pending, or has been decreed, or dismissed. It does not need any authority to support the proposition that valuation of immovable property is likely to appreciate. A property valued at Rs.3,00,000/ in 1974 may fetch a higher amount in later years. Appreciation or otherwise of immovable property because of lapse of time or any other reason is essentially an issue of fact and can be determined by the forum of facts. The Tribunal had before it two different views of the authorities below. On a consideration of the materials on record, it has for the reasons assigned in the impugned order come to the conclusion that the view taken by the learned assessing authority is fit to be upheld. We entirely agree with the order of the learned Tribunal that valuation of the property had appreciated at the time of assessment. After all the assessee is the defendant in the suit and is not alienating the property for three lacs. Secondly, the impugned order does indicate enhancement of valuation of the property and, therefore, does not require any further scrutiny. The appeals entirely raise issues of facts, none of law, let alone a 9 substantial question of law. We do not find any merit in these appeals. 8. We, therefore, answer the four questions as follows: (i) We are of the view that the learned Tribunal is correct in reversing the order of the learned Commissioner, Income Tax(A), and in restoring the assessment order, with respect to valuation of Block C of Hathtwa Market, Chapra. (ii) Valuation of a property is an issue of fact. The Tribunal has found that, with passage of time, valuation of the property enhanced and is, therefore, justified in refusing to follow its own order for the assessment years 1979-80, 1980- 81, 1991-92, in so far valuation of Block C of Hathwa market, at Rs.3,00,000/- is concerned. The issue does not involve any question of law. (iii) The rule of precedence or consistency does not imply to factual aspects, particularly in a situation like the present one which is with respect to the market valuation of an immovable property which may change year to year. (iv)The learned Tribunal was justified in disturbing the valuation of the property and restoring that of the learned assessing authority. 9. In the result, the four questions are answered against 10 the assessee (appellant) and in favour of the Revenue. These appeals are dismissed. In the facts and circumstances of the case, there shall be no order as to costs. ( S.K. Katriar, J.) (Kishore K. Mandal,J.) The Patna High Court Dated 27th April, 2009 N.A.F.R./ Vinay "