V. V. KAMAT, J. :
These references come before us for answer to the following four questions :-
1. 'Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that a proper reference under s. 16A of the WT Act, 1957 has been made and the enhancement in the value of a hotel building on the basis of the valuation report was sustainable ?
2. Whether, the Tribunal is justified in holding that the provision for reference under s. 16A is merely procedural in nature and the WTO was justified in adopting the value determined by the valuation officer as one determined by an expert ?
3. Whether, the Tribunal was justified in holding that the income from the business for the asst. yrs. 1970-71 to 1976-77 was low was not a factor to be taken into account and the method adopted by the valuation officer was proper ?
4. Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the WTO was justified in not following the instructions of the Board in Circular No. 3 WT of 1957 dt. 28th September, 1957 ?'
Although the appeals before the Tribunal relate to asst. yrs. 1970-71 to 1976-77, we find that the reference applications are confined to asst. yrs. 1972-73 to 1976-77. This would not alter the position.
2. Bare reading of these questions, especially question Nos. 1 to 3 would show that in essence and for all purposes, the questions are pure and simple questions of fact dealing with a situation wherein the WTO, acting under s. 16A of the WT Act, 1957, decided to ascertain the valuation of the hotel building and in pursuance thereof acting under the powers of the above section, called for the valuation report and, on a consideration of the material before him, determined the enhanced value of the hotel building in question. In regard to this situation which is consistently considered by the three authorities, question No. 1 urges upon us to ascertain if the reference was proper and consequently also to consider as to whether the enhancement in the value of the hotel building on the basis of the valuation report could be sustained. Question No. 2 is also displaying similar situation, though couched in different words and expressions, asking us to ascertain whether WTO could be justified in adopting the value determined by the valuation officer and to act upon it.
3. Question No. 3 also is another face, and urges as to whether the WTO was right in not taking into account the business income for the assessment years in question and that too in the process of determination of the valuation of the hotel building. On plain common sense the nature of the business and income therefrom during the assessment years in question would have no relation whatsoever with regard to the valuation of the hotel building itself. At any rate, the question is a pure and simple question of fact.
4. For question No. 4 with regard to the applicability of the Circular dt. 28th September, 1957 complete answer is provided in the judgment of the Tribunal is second appeal in para 3 thereof to the effect that the decision of the Supreme Court in Juggilal Kamlapat Bankers vs. WTO : [1984]145ITR485(SC) rules the situation and not the circular relied upon. In short, what is placed for consideration before the two fact-finding authorities and available to us through their consistent conclusions would be as follows : The WTO proceeded to act under s. 16A of the WT Act. It was urged before him that this step was taken by the officer without application of mind and for no reasons whatsoever as there had been no remark in regard thereto in the order sheet of the officer. The first appellate authority has considered the position and has recorded that in the letter dt. 3rd August, 1978 to the valuation officer, the required reason and satisfaction is available showing the difference between the fair market value returned by the assessee and as estimated by the WTO exceeding the limits prescribed in r. 3 under the Act. It has been found as a factual conclusion that the WTO exercised discretion and had not acted mechanically in referring the matter to the valuation officer.
5. The first appellate authority has also considered all objections raised for and on behalf of the assessee before him and has discussed them specifically in the order in details.
6. Similarly, the Tribunal, Cochin Bench, after referring to the contentions, discussed them. The Tribunal has observed that there was no objection put forth by the assessee before the WTO and the action of the WTO under s. 16A of the Act has been allowed to pass over in silence. The Tribunal has also reiterated and reaffirmed the conclusion of the first appellate authority that the reference to the valuation officer in exercise of powers under s. 16A of the Act is a product of application of mind in regard to which there is material in the form of letter dt. 3rd August, 1978. The Tribunal has also considered the statutory provisions of s. 16A of the Act requiring the officer to make a reference and the only objection of the assessee raised before, it is to the effect that the matter has been referred to the valuation officer in a routine and mechanical manner. The Tribunal found that the reference to the valuation officer would have to be understood as proper and valid.
7. Not only that both the authorities have considered these aspects concurrently and in all the necessary details, in our judgment, a bare perusal of the table showing the value shown by the assessee in his return as compared to the value adopted by the WTO is enough to reinforce the situation that reference to the valuation officer would have to be understood as a must on the facts and circumstances of the case. The said table is as follows :
Assessment Year
Value shown by the assessee (In Rs.)
Value adopted by the WTO (In Rs.)
1970-71
2,97,199
3,92,000
1971-72
3,01,963
4,13,000
1972-73
4,74,706
10,07,300
1973-74
4,74,706
11,65,000
1974-75
4,74,706
11,65,200
1975-76
4,74,706
11,65,200
1976-77
4,74,706
11,75,200
8. In our judgment, the questions are pure and simple questions of fact and in regard to question No. 4, in view of the decision of the Supreme Court (supra) it is not possible to see Circular dt. 28th September, 1957 having any force whatsoever.
9. For the above reasons, it is not necessary to answer the questions and we decline to do so.