Law:

Section:

Section 25(2), read with section 7 of Wealth-tax Act, 1957 - Revision by Commissioner - Assessment years 1980-81 to 1982-83 - Assessee had a partnership share in a firm - Said firm was owner of an immovable property - For relevant years, assessee valued said property at Rs.21,641 and included his share of property in his wealth-tax returns - Assessing Officer completed assessment - Subsequently, Commissioner initiated action under section 25(2) as according to him, assessment orders framed by Assessing Officer were erroneous and prejudicial to interest of revenue - It was recorded by Commissioner that said property had been incorrectly valued at Rs.21,641 because about two months before valuation date, firm had entered into an agreement for sale of said property at an agreed price of Rs.11,25,000 and, that subsequently, in fact, property had been sold out at agreed price - He, therefore, set aside assessment orders - However, Tribunal held that price of Rs. 11,25,000 did not represent fair market value of property in question on relevant valuation dates and, therefore, there was no error in assessments framed by Assessing Officer, and hence, no prejudice had occasioned to interests of revenue - Whether when entire basis for initiating action under section 25(2) was agreement for sale entered into by firm, in view of Tribunal's findings which had not been disputed by revenue, order of Commissioner could not be sustained - Held, yes FACTS The assessee was having partnership share in a firm. The partnership firm was the owner of an immovable property and the said property was valued at Rs. 21,641 in each of the three assessment years. The assessee included his share of this immovable property owned by the partnership firm while returning the wealth in the form of partnership share. The Assessing Officer completed the assessments. Subsequently, the Commissioner initiated action under section 25(2), as according to him, the assessments framed by Assessing Officer were erroneous and prejudicial to the interests of the Revenue. It was recorded by the Commissioner that the said property had been incorrectly valued at Rs. 21,641, because on 3-9-1981, the partnership…

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