Law: Wealth Tax Act, 1957

Section: 27(3)

Wealth tax--- ----Reference---Valuation of assets ---Res judicata---Valuation accepted for a number of years---No new facts---Question whether valuation was correct in a subsequent year could not be referred---Indian Wealth Tax Act, 1957, S.27. Normally, res judicata does not apply to taxation proceedings. However, this general rule is subject to the qualification that a finding reached in the assessment proceedings for an earlier year after due inquiry would not be reopened in a subsequent year, if no fresh facts are found in the subsequent assessment year. This is on the principle that there should be finality and certainty in all litigations including those arising out of the tax laws. Held accordingly, rejecting the application to direct reference, that the valuation of the house property which was adopted by the Income Tax Appellate Tribunal and continued for a number of years had become final and there being no change in the circumstances, the assessee could not be allowed now to reagitate the same issue on the same facts and circumstances. Sardar Kehar Singh v. CIT (1992) 195 ITR 769 (Raj.) applied. Radhasoami Satsang v. CIT (1992) 193 TTR 321 (SC) ref. JUDGMENT V.K. SINGHAL, J: --The assessee has submitted an application under section 27(3) of the Wealth Tax Act, 1957, raising the following question arising out of the order of the Tribunal in respect of the assessment year 1978-79: "Whether, under the facts and circumstances of the case, the Tribunal was justified, in valuing the Bombay property on the basis of the valuation made by the final valuer adopting hypothetical rent capitalisation method and rejecting the claim of the assessee for valuing the property on the basis of capitalisation of actual receipts of rent?" The brief facts of the case are that there was a property, which was given on rent to Messrs N.P. Metal Works. The said firm consisted of the assessee and his brother as partners. The rent, which was received from the property was not considered as adequate and was considered collusive. A suit was also pending in the Court and, therefore, the valuer estimated the valuation of the property at Rs.1,95,000. Half share of it was taken at…

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