Judgment:
ORDER
Sohani, J. - By this reference under s. 27(1) of the WT Act, 1957 (hereinafter referred to as 'the Act') the Income Tax Appellate Tribunal, Indore Bench has referred the following question of law to this Court for its opinion :
'Whether on the facts and in the circumstances of the case, the Tribunal was justified in directing the WTO to determine the value of the residential house in question in accordance with the provisions of r. 1-BB of WT Rules, even though the said rule was enacted on 1-4-1979 and the assessment was completed after that date ?'
2. The material facts giving rise to this reference, briefly, are as follows :
The assessee owns a residential house at 21, Race Course Road, Indore. In the return of wealth filed by the assessee for the asst. yr. 1977-78, the assessee declared the value of the house as Rs. 3,25,000. Later on, a revised return was filed by the assessee whereby the value of the house was declared as Rs. 58,450 by valuing the property according to r. 1-BB of the WT Rules (hereinafter referred to as 'the Rules'). The WTO did not accept the revised valuation and valued the property at Rs. 3,25,000. The finding of the WTO was upheld in this behalf by the AAC. On further appeal, the Tribunal held that though r. 1-BB of the Rules had come into force with effect from 1-4-1969, the rule was procedural and was applicable to pending assessments. The Tribunal, therefore, set aside the order of assessment with regard to the aforesaid property and remanded the matter to the WTO directing him that the value of the house in question be determined in accordance with the provisions of r. 1-BB of the Rules. Aggrieved by that order, the Revenue sought a reference and it is at the instance of the Revenue that the aforesaid question of law has been referred by the Tribunal to this Court for its opinion.
3. Having heard ld. counsel for the parties, we have come to the conclusion that this reference has to be answered in the affirmative and against Revenue. It is no doubt true that r. 1-BB of the Rules has come into force with effect from 1-4-1979 but as held by a Division Bench of the Karnataka High Court in CWT Karnataka, Bangalore v. Vidyavathi Kapur : [1984]150ITR319(KAR) the rule is procedural. No, decision to the contrary was brought to our notice. We respectfully agree with the view takes in : [1984]150ITR319(KAR) . It is not disputed that the assessment proceedings were pending when the amended r. 1-BB came into force. The Tribunal was therefore, justified in setting aside the order passed by the WTO and in remanding the case to the WTO to determine the value of the house in accordance with the provisions of r. 1-BB of the rules.
4. Our answer to the question referred to this Court is, therefore, in the affirmative and against the Revenue. In the circumstances of the case, parties shall bear their own costs of this reference.