Law: Wealth Tax Rules, 1957

Section: 1BB

Law: Wealth Tax Act, 1957

Section: ScheduleIII

Wealth tax----- Valuation of residential house---Method of valuation---Law applicable--­Schedule III to Wealth Tax Act introduced with effect from 1-4-1989--­Amended provisions applicable to all pending proceedings---Wealth Tax Act, 1957, S.7 & Sched. III---.Indian Wealth Tax Rules, 1957, R.1-BB. The Wealth Tax Officer held that the- valuation of the residential house for the purpose of wealth tax for the assessment year 1984-85 could not be made by applying Schedule III to the Wealth Tax Act, 1957. which came to be inserted on April, 1, 1989, by the Direct Tax Laws (Amendment) Act, 1989. The Tribunal held that the property could De valued by applying the amended provision. On a reference: Held, that the assessment had not become final when the Wealth Tax Act was amended in the year, 1989 as the appeal against the order of assessment was pending. Though the assessment was made on March 13, 1989, the order of assessment was open to challenge and the assessment order was capable of being examined in tile light of the procedural law that prevailed at the time the appeal was considered. Accordingly, the Commissioner of Income-tax was right in holding that the residential house of the assessee should be valued by applying the amended provisions found in Schedule III to the Wealth Tax Act which was introduced with effect from April 1, 1989. CWT v. Sharvan'Kumar Swarup & Sons (1994) 210 ITR 886 (SC) fol. JUDGMENT R. JAYASIMHA BABU, J.---We find no substance in this reference. In the case of CWT v. Sharvan Kumar Swarup & Sons (1994) 210 ITR 886 (SC), it has been held that the rules providing for method of valuation under the Wealth Tax Act are not substantive but procedural law and that the provisions of the amended rules are applicable to all pending proceedings. The Court, inter alia, held (headnote): "Rule 1-BB of the Wealth Tax Rules, 195,7, which came into' force, on April 1, 1979, prescribing the method for valuing a house wholly or mainly used for residential purposes, merely provides a choice amongst well-known and well-settled modes of valuation. Even in the absence of rule 1-BB, it would not have been objectionable, nor would there have been any…

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