Law: Wealth Tax Act, 1957

Section: 27A

JUDGMENT Madan B. Lokur, J.-It is often said, though mistakenly, that consistency is the virtue of fools. The complete lack of it by the Revenue (as the facts of this batch of cases demonstrates) really puts the theory to an acid test. 2. Three companies, M/s Allied Finance Pvt. Ltd., M/s R.K.K.R. Industries Pvt. Ltd. and M/s R.K.K.R. International Pvt. Ltd. purchased property bearing No. 12, Aurangzeb Lane, New Delhi by a sale deed dated July 22, 1972, for a sum of Rs. 8,00,000. It was then let out to two directors of these companies at Rs. 22,500 per month. 3. When the question of valuing the property came up before the Wealth-tax Officer, for the relevant assessment year 1985-86, he was of the view that it should be valued at Rs. 7,50,00,000. Since the assessee was l/3rd owner of the property, its net wealth was valued at Rs. 2,50,00,000. 4. Feeling aggrieved, all three companies filed appeals before the Commissioner of Wealth-tax (Appeals) (for short "the CWT (Appeals)") who was of the view that the value of the property should be calculated on the basis of its annual letting value worked out in the income-tax assessment. 5. The Revenue challenged the order of the Commissioner of Income-tax (Appeals) before the Income-tax Appellate Tribunal (the ITAT). By the impugned order dated January 1, 1999, the Income-tax Appellate Tribunal disposed of the appeal on the basis of its earlier order dated May 4, 1998, and directed the Assessing Officer to adopt the value of the property on the basis of its municipal valuation. 6. The Revenue has preferred the present appeal under section 27A of the Wealth-tax Act directed against the order of the Income-tax Appellate Tribunal dated January 1, 1999, which follows the order dated May 4, 1998. 7. Learned counsel for the respondent placed before us a chart (which we have since completed on the basis of all pending cases) indicating how the Revenue has dealt with similar orders of the Income-tax Appellate Tribunal in respect of each of the three companies for various assessment years. This chart makes for some rather interesting reading. Assessment year Allied Finance Pvt. Ltd. R.K.K.R. Industries Pvt. Ltd. R.K.K.R.…

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